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A  URIKF  roruLAirAcoouNT 

_- "^ OF   ALL   TIIL    FlNAXCrAT> 

-PANICS 


AND   COMMERCIAL 


REVULSIONS 

m^  IN   THE 

|f     UNITED  STATES,  FROM  1G90  TO  1857 

^^ 

tL  A  MORE  PAUTICULAR  HISTORY  OF  THE  TWO 

m-  GREAT  REVULSIONS  OF 

18  3  7     AND     18  5  7. 
BY  MEMBERS  OP  THE  NEW-YORK  PRESS. 


y.uUivvA  Hccording  to  Act  of  Congress,  in  the  year  1857,  by  J.  C.  Hanky,  ui  the  Cleric  s  OJlicc 
of  the  District  Co-irt  of  tho  United  States,  for  the  Southern  District  of  New-York. 


NEW-YORK: 
li  J.     (J.     lIAiSTEY,    PUI3LIS11KK. 


185T. 


k 


RQ3^    ^   TQXJSI^T,  WKQLBSAIiE   ^C^ENTB. 


from 
^ .-  Baker  Library 

xd^icc,"  CoppERtiKLJ),  ''you  know.     Annual  inco 

.iiutii  expenditure — nineteen,  nineteen  six  ;  rcsiult — ha 

,..o6nie — twenty  i)ounilt^.    Annual  expenditure — twenty  pou 

^^±\  result— nnsery.     The  blossom  is  blighted ;  the  leaf  is  witl 

y^d  of  day  goes  down  upon  the  dreary  seene,  and,  in  short,  you 

ix  floored." — Mr.  Micaavbku. 


PREFACE. 
105fil8 

Thk  difficulties  under  which  the  whole  country  ii^  at  present 
laboring  will  be  richly  compensated  if  they  should  lead  to 
such  a  renovation  of  our  business  system  as  shall  prevent  the 
recurrence  of  similar  periods  of  panic  aud  disaster. 

To  secure  this  most  desirable  end,  it  is,  above  all  other 
things,  necessary,  that  the  causes  of  financial  revulsions  should 
be  understood,  and  their  incidents  noted. 

One  of  the  objects  of  this  little  work  is  to  aid  the  public  in 
coming  to  correct  conclusions  on  this  momentous  subject.  It 
(jonsists,  lirst,  of  tlid  facts  of  the  difierent  periods  of  revulsion 
in  our  history,  compiled  from  the  records  of  those  periods. 
Sccondl}^  we  have  presented  a  selection  of  the  opinions  of 
eminent  individuals  respecting  the  causes  of  revulsion. 

Other  matters,  of  interest  at  the  present  moment,  arc  ap 
pended  and  interspersed  ;  the  whole  forming,  we  trust,  a  tinu  - 
ly,  interesting  and  useful  compilation. 


I^TIT'T 


3/ 


PANICS   AND   RB^VULSIONS. 


CHAPTER  I. 

PANICS  AND    REVULSIONS   PREVIOUS  TO  THE  GREAT   REVULSION   OF  1831. 

The  distinction  between  a  Panic  and  a  Revulsion  in  the  commercial  world, 
is  obvious.  A  Panic  is  a  pressure  in  the  money  market  without  adequate 
cause.  A  Revulsion,  on  the  contrary,  is  pressure  with  adequate  cause,  and 
that  cause  invariably  is  a  previous  Destruction  of  Value.  A  national  Revul- 
sion is  a  national  pay  day.  The  nation  has  been  drawing  on  the  Future,  and 
the  Future  dishonors  the  draft.  The  forcing  process  is  then  applied,  wide- 
spread ruin  is  the  result,  and  a  long  period  of  paralysis  ensues. 

THE    REVULSION    OF    1690. 

We  must  go  as  far  back  as  1690  to  find  the  origin  of  paper  money  in  New 
England.  In  that  year  the  pious  and  warlike  colony  of  Massachusetts,  in 
the  excess  of  its  loyalty  to  the  mother  country,  and  its  hatred  of  catholic 
France,  fitted  ©ut,  at  a  prodigious  expense,  an  expedition  against  Quebec. 
The  expedition,  commanded  by  Sir  William  Phipps,  consisted  of  thirty-four 
vessels  and  seven  thousand  men.  The  forces  reached  Quebec  in  safety,  but 
after  landing,  fighting  two  gallant  actions,  and  bombarding  the  fortress,  they 
were  compelled  to  retire.  On  their  return,  eight  of  the  largest  ships  were 
wrecked  in  the  Gulf  of  St.  Lawrence,  and  the  expedition  returned  frustrated 
and  disheartened.  To  defray  the  immense  expenses  (immense  for  that  period), 
bills  of  credit  were  issued,  which  first  initiated  the  colonies  into  the  perilous 
channel  of  a  paper  currency.  The  other  colonies  followed  the  example,  when- 
ever an  emergency  arose.  Yery  soon,  the  bills  of  credit  depreciated  in  value, 
and  produced,  in  time,  great  disaster  to  the  infant  commerce  of  the  colonies. 
In  New  York,  then  a  mere  village,  it  required  two  dollars  of  paper  to  buy  one 
dollar  of  silver.     In  Boston,  the  depreciation  was  fifty  per  cent. 

THE  REVULSION  OF  1*148. 
In  1745,  Massachusetts,  ever  ready  for  a  tilt  against  the  French,  fitted  out 
a  most  costly  expedition  against  Louisburgh,  a  powerful  fortress  on  the  island 
of  Cape  Breton.  The  fortress  was  captured,  and  the  expedition  returned 
cov(ired  with  glory.  But  the  expense  demanded  a  fresh  issue  of  between  two 
and  three  millions  in  bills  of  credit,  which  soon  depreciated  to  an  unprece- 
dented and  alarming  extent^    In  the  year  1^48,  it  took  eleven  hundred  pounds 

/63 


2  THE  REVULSION  OF  1780,  ETC. 

in  their  paper  to  purchase  one  hundred  pounds  in  gold  or  silver.  The  paper 
of  all  the  colonies  had  wofully  fallen  in  value.  To  procure  a  hundred  pounds 
in  specie,  required 

In  Massachusetts'  paper,  1100  pounds, 

"  New  York             *'  190      " 

*'  East  Jersey           "  190      " 

•'  West  Jersey         *'  180      " 

"  Pennsylvania        *'  180      " 

"  Maryland              "  200      " 

*'  Virginia                 "  125       '' 

"  North  Carolina     "  1000      " 

"  South  Carolina     "  TOO      " 
Such  facts  as  these  show  the  cause  of  the  deep-rooted,  and  not  yet  eradi 

cated  antipathy  of  the  American  people  to  a  paper  currency  of  every  descrip- 
tion whatever.  Thus  early  did  they  begin  to  attach  an  extravagant  value  to 
the  possession  of  hard  cash. 

THE  REVULSION  OF  1780. 
The  Revolutionary  war  caused  the  greatest  destruction  of  value  which  this 
country  has  ever  known.  It  cost,  in  money  and  money's  worth,  not  less  than 
three  hundred  milhons  of  dollars,  every  dollar  of  which  somebody  had  to  pay. 
The  year  of  stagnation  and  prostration  which  began  with  1780,  and  continued 
till  1789,  were  the  years  in  which  the  country,  (without  knowing  it),  was  pay- 
ing for  the  war.  Congress  had  issued  one  hundred  and  sixty  miUions  of  paper 
money,  which  after  falling  lower  and  lower  in  value,  became  in  1780  abso- 
lutely worthless,  and  ceased  to  circulate.  The  people,  impoyerished  by  the 
war,  without  a  currency  of  any  kind,  except  a  few  millions  of  specie,  without 
union,  without  a  practicable  government,  without  credit  either  at  home  or 
abroad,  would  have  utterly  despaired  had  not  the  bounty  of  the  soil  and  their 
own  industrious  hands  always  secured  a  sufficiency  of  the  bare  necessaries  of 
life.  There  were  no  great  cities,  then,  swarming  with  laborers  living  from 
hand  to  mouth,  whom  the  first  shock  of  a  financial  reverse  deprived  of  their 
only  means  of  subsistence.  A  nation  of  hardy  yeomen,  mostly  cultivating 
their  own  land,  making  their  own  clothes,  and  owning  their  own  houses,  is  to 
a  great  extent,  independent  of  all  reverses,  except  such  as  destroy  or  diminish 
the  productions  of  the  earth.  With  the  administration  of  General  Washing- 
ton and  Alexander  Hamilton,  the  country  began  its  wonderful  career  of 
business  prosperity. 
SUSPENSION  OF  SPECIE  PAYMENTS  BY  THE  BANK  OF    ENGLAND  IN  1*I9Y. 

"On  the  twenty-sixth  of  February,  1797,  Sunday,  an  order  of  the  Privy 
Council  was  transmitted  to  the  Bank  of  England  prohibiting  the  further  pay- 
ment of  specie,  until  the  pleasure  of  Parliament  should  be  made  known.  Par- 
liament took  the  subject  into  consideration  the  next  day,  February  27th,  and 
approved  of  the  order  of  the  Privy  Council.  The  suspension  of  specie  pay- 
ments was  originally  intended  to  be  only  a  temporary  measure,  and  the 
strongest  assurances  were  given  to  this  effect  on  the  part  of  the  Bank  and  the 
Government. 


SUSPENSION  OF  BANK  OF  ENGLAND.  8 

"It  was,  however,  continued,  from  time  to  time,  but  always  as  a  temporary 
measure,  until  1819,  22  years  after  the  suspension,  steps  began  seriously  to  be 
taken  for  resuming  specie  payments,  which  were,  in  fact,  resumed  on  the  1st 
of  May,  1 823.  The  Bank  thus  presents  the  singular  example  of  a  virtual 
insolvency  for  26  years,  and  eventual  redemption  of  its  paper  and  credit ;  and 
this  return  to  specie  payment  was  not  attenae'd  by  any  sudden  revulsion  or 
commercial  shock.  Preparations  were  made  for  it  long  beforehand.  The 
amount  of  the  notes  of  the  Bank  in  circulation  was  reduced  from  about 
£24,000,000  to  about  £18,000,000.  In  the  mean  time  a  new  coinage  of  gold 
had  been  issued,  in  1821-22,  to  the  amount  of  £14,877,547,  which  supplied  the 
chasm  made  in  the  circulation  of  the  country  by  the  reduction  of  the  amount 
of  Bank  of  England  notes,  and  also  went  to  replenish  the  vaults  of  the  Bank 
in  preparation  for  the  run  that  might  be  made  on  the  resumption  of  payment ; 
but  the  danger  was  passed  with  the  greatest  facility. 

"  The  bank  notes  had  depreciated,  or,  as  the  phrase  was  at  the  time,  the  price 
of  bullion  had  gradually  risen,  so  as  to  be,  at  one  period,  at  the  rate  of  14  or  15 
per  cent. ;  and  if  the  Bank  had  then  stopped  suddenly,  and,  if  we  may  imagine  it 
possible,  had  redeemed  the  whole  of  its  paper,  £25,000,000  or  more,  with 
specie,  it  would  have  been  a  gain  to  the  holders  of  the  notes,  in  the  whole,  of 
£3,500,000,  and  a  loss  to  the  then  debtors  to  the  Bank  of  the  same  amount, 
assuming  the  depreciation  to  be  14  per  cent.;  while  the  Bank  itself  would 
have  lost  only  the  amount  of  bad  debts,  which  would  have  been  made  by  such 
a  sudden  and  tremendous  revulsion ;  for,  the  moment  of  the  Bank  resuming 
to  pay  specie  itself,  by  this  very  operation,  it  reduced  the  payments  to  the 
Bank,  by  its  debtors  to  specie  ;  for  the  Bank  had  a  right  to  demand  payment 
of  notes  and  bills  discounted  in  specie,  or,  what  would  have  been  equivalent, 
its  own  notes.  Such  a  measure  would  evidently  have  shaken  the  kingdom  to 
its  foundation,  and  probably  have  brought  down  its  commercial,  financial,  and 
economical  system  in  ruins.  Instead  of  such  a  catastrophe,  either  in  discon- 
tinuing or  renewing  payments  of  specie,  each  of  which  was  equally  hazardous 
and  difficult,  ihe  transition  in  the  depreciation  of  the  paper  was  gradual  and 
almost  imperceptible,  and  after  the  overthrow  of  Napoleon,  its  rise  in  value  was 
again,  for  the  most  part,  as  gradual,  until  it  arrived  to  a  par  with  gold,  before 
the  resumption  of  specie  payments.  In  a  pohtical,  financial,  and  commercial 
point  of  view,  this  Institution,  from  the  suspension  to  the  resumption  of  specie 
payments,  presents  a  stupendous  phenomena  unparallelled  in  history.  The 
suspension  of  payment,  in  1797,  was  one  of  those  bold  measures  which  are 
justified  only  by  extreme  cases,  and  which,  in  such  cases,  are  only  prudent 
measures.  The  whole  system  of  financial  administration,  and  all  the  commer- 
cial combinations  and  connexions  of  the  kingdom,  were  involved  in  the  affairs 
of  the  Institution  at  the  time  of  stopping,  1797.  The  holders  of  the  notes,  and 
the  depositors,  were  pressing  to  the  Bank  for  specie,  of  which  there  remained 
in  the  vaults  only  £1,272,000  while  the  notes  and  claims  outstanding,  and 
which  might  be  demanded,  were  £8,640,250,  and  the  demands  were  pouring 
in  with  a  still  increasing  tide.  It  seemed  probable  that  the  Bank  must  stop, 
after  paying  out  this  specie  ;  the  shock,  whatever  it  might  be,  must  be  encoun- 
tered, and  it  was  very  justly  supposed  that  it  would  be  in  a  measure  broken, 
in  anticipating  the  necessity,  and  stopping  with  more  than  a  miUion  in  its 
vaults,  instead  of  waiting  until  they  should  have  been  emptied. 

The  reasons  given  in  Parliament  in  favor  of  this  suspension  of  payment,  and 
of  its  continuance  from  time  to  time,  were  : — 1.  That  the  Bank  could  not  con- 
tinue its  discounts  and  its  payments  in  specie  ;  and  if  its  discount  were  stopped 
or  greatly  reduced,  the  commerce  of  the  country  would  be  destroyed :  2. 
That  the  credit  of  the  government  would  be  lost  if  the  Bank  should  cease  to 
make  advances  on  its  taxes :  8.  That  specie  payments  were  of  no  benefit  to 
England,  as  the  specie,  on  being  drawn  from  the  Bank,  went  abroad :  4.  That 
it  was  more  important  that  the   Bank  should  exist,  than  that  it  should 


4  THE  PANIC  OF  1798  IN  THE  UNITED  STATES,  ETC. 

meet  its  payments  at  the  expense  of  its  existence  :  5.  That  the  commercial 
arrangements,  combinations,  and  relations,  existing  in  the  kingdom,  would  be 
broken  up  by  the  dissolution  of  this  Institution,  and,  being  once  broken  up, 
could  never  be  renewed  ;  and,  6.  That  it  was  better  to  stop  specie  payments, 
while  specie  and  bullion  could  be  kept  in  the  country  by  that  means.  Such 
were  the  reasons  given  in  favor  of  the  measure,  and  though  it  has  been  cen- 
sured by  some,  who  have  pretended  to  discover  in  it  the  cause  of  much  finan- 
cial and  commercial  derangement,  yet  they  do  not  show  by  what  other  course 
Great  Britain  could  have  struggled  through  the  terrible  conflicts  of  that 
period." 

THE  PANIC  OF  1798  IN  THE  UNITED  STATES. 
This  was  really  a  terrible  time.  We  call  it  a  Panic,  because,  so  far  as  the 
histbry  of  the  period  records,  there  does  not  appear  to  have  been  any  adequate 
cause  for  the  alarm.  In  other  words,  there  does  not  appear  to  have  been  a 
previous  destruction  of  value  to  a  sufficient  amount  to  cause  a  genuine  com- 
mercial revulsion.  The  nation  thought  itself  to  be  on  the  very  eve  of  a  war 
with  France.  General  Washington  had  accepted  the  command  of  the  army, 
and  General  Hamilton  was  his  second.  An  army  was  raising,  and  everything 
foreboded  an  immediate  conflict.  Meanwhile  the  French  armies  under  Bone- 
parte  were  filling  the  world  with  the  fame  of  their  exploits,  and  England,  that 
bore  the  brunt  of  that  great  struggle,  seemed  about  to  be  overpowered.  A 
financial  panic  in  London  was  at  its  height,  and  the  Bank  of  England  had 
suspended  specie  payment.  John  Adams  was  president  of  the  United  States, 
and  the  ahen  and  sedition  laws  were  in  force,  keeping  the  nation  in  ceaseless 
and  bitter  agitation.  Political  feeling  ran  so  high,  that  men  of  opposite 
parties  could  scarcely  salute  one  another  in  the  streets,  and  thousands  were 
of  the  opinion  that  the  young  republic  had  run  its  course.  In  the  midst  of 
these  events  a  financial  panic  arose,  and  hundreds  of  merchants  failed.  In 
those  days,  failure  to  meet  an  obligation  was  a  serious  affair,  as  imprisonment 
for  debt  had  no  where  been  abohshed.  The  prisons  of  Philadelphia,  (then 
our  principal  city,)  were  filled  with  merchants,  many  of  whom  were  of  old  and 
honorable  standing  in  the  business  of  the  country.  The  panic  was  severe  but 
brief.  The  sky  soon  brightened.  Peace  was  made  with  France.  The  elec- 
tion of  Jefferson  and  Burr  in  1800  gave  to  the  democratic  party  its  first  tri- 
umph.    The  country  was  satisfied,  and  bounded  forward  in  its  bright  career. 

THE   REVULSION    OF    1808. 

A  war  is,  with  regard  to  business,  a  three-edged  sword.  The  anticipation 
of  it  is  one  disaster ;  carrying  it  on,  is  another  ;  paying  for  it,  after  it  is  over, 
is  a  third.  From  1808  to  1817,  the  business  of  the  United  States  was,  more 
or  less,  affected  by  the  war  of  1812.  Jefferson's  embargo  (passed  in  Decem- 
ber, 1807)  put  an  end,  for  a  time,  to  the  commerce  of  Xho,  country.  It  pro- 
hibited the  departure  of  any  merchant  vessel  from  the  ports  of  the  United 
States !  The  effect  may  be  imagined.  Merchants,  clerks,  seamen,  shipmas- 
ters, and  all  the  great  army  of  men  who  are  supported  by  commerce,  were 
deprived  of  employment  and  revenue.     The  great  planting  interest  of  the 


JACKSON'S  WAR  ON  THE  UNITED  STATES  BANK.  6 

South  was  first  paralyzed,  then  ruined.  The  great  cities  languished;  the 
farmers  of  the  North,  who  had  been  growing  rich  by  supplying  the  beUigerent 
powers  of  Europe  with  bread  and  meat,  could  no  longer  sell  their  surplus  pro- 
ductions. Seldom  have  the  temper  and  patriotism  of  the  country  been  so 
severely  tried  as  during  the  operation  of  the  various  embargo  and  non-inter- 
course acts  of  Jefferson  and  his  successor. 

THE    REVULSION   OP    1815. 

This  was  the  year  of  the  general  peace.  Our  own  war  was  at  an  end,  and 
the  exile  of  Napoleon  at  St.  Helena  gave  repose  to  Europe.  These  happy 
events,  however,  brought  upon  us  one  of  the  severest  commercial  reverses  we 
have  ever  experienced.  Despite  the  embargo  and  the  war  of  1812,  a  consider- 
able trade  had  been  latterly  carried  on  between  the  United  States  and  Europe, 
and  the  war  itself  had  given,  as  war  always  does,  an  unnatural  activity  to 
many  branches  of  business.  With  the  peace  of  1816,  ceased  for  a  long  time 
the  European  demand  for  American  provisions.  The  currency,  too,  had  be- 
come exceedingly  deranged.  In  181 Y,  the  Bank  of  the  United  States  began 
its  career  by  importing  into  the  country  over  seven  miUions  of  dollars  in  specie, 
at  an  expense  of  half  a  million  of  dollars.  Manufactures  revived  under  the 
operation  of  the  revised  tariff,  and  the  country,  for  the  next  fourteen  years, 
enjoyed  great  and  nearly  uninterrupted  prosperity.  There  were,  it  is  true, 
occasional  periods  of  panic  and  disaster,  as  in  1822  and  1825,  but  at  no  time" 
was  there  a  general  revulsion  and  universal  ruin,  such  as  occurred  in  1837. 


CHAPTER  II. 

EVENTS   PRECEDING   THE    GREAT    CRASH    OF    1837. 
Our  first  object  shall  be  to  narrate  the  facts  respecting  the  revulsion  of  1837, 
leaving  to  another  chapter  the  various  opinions  respecting  it  which  the  time 
called  forth.     The  facts  are  few  and  easy  to  be  understood. 

GEN.  Jackson's  war  upon  the  BA^lK  of  the  united  states. 
In  the  year  1832,  the  Bank  of  the  United  States,  situated  in  the  city  of 
Philadelphia,  held  a  position  in  the  finances  of  the  western  continent  similar 
to  that  now  enjoyed  in  the  eastern  continent  by  the  Bank  of  England.  It 
had  existed  for  fifteen  years,  during  the  greater  part  of  which  it  had  been 
managed  with  skill  and  success.  Its  capital  was  35  millions  of  dollars,  which, 
owing  to  the  high  premium  commanded  by  the  stock,  was  equivalent  to  near- 
ly 50  millions.  The  number  of  its  directors  was  twenty-five,  of  whom  five 
were  chosen  by  the  federal  government,  and  fifteen  by  the  stockholders. 
The  stockholders  were  3400  in  number,  of  whom  more  than  500  were  foreign- 
ers. The  bank  had  branches  in  all  the  principal  cities  of  the  Union.  Its 
clear  profits  in  the  year  1831,  reached  the  enormous  sum  of  $3,455,598.     It 


6  VETO  OF  THE  RE-CHARTERING  BILL. 

was  the  bank  in  which  was  deposited  the  public  money,  which  disbursed  the 
public  money,  and  which,  at  times  Avhen  the  public  money  was  short,  made 
up  the  deficiency.  The  great  fact  respecting  it  was,  that  the  bank  notes 
issued  by  the  Bank  of  the  United  States  were  as  good  as  gold  in  any  part  of 
the  United  States.  There  was  no  discount  upon  them  anywhere.  A  man 
provided  with  a  sufficiency  of  United  States  Bank  bills,  could  travel  from 
Maine  to  Georgia,  and  from  Georgia  to  Astoria,  without  incurring  the  slight- 
est loss  or  inconvenience.  In  fact,  wherever  there  was  a  civilized  commu- 
nity on  earth,  there  the  bills  of  this  great  bank  could  be  exchanged  for 
commodities.  In  London  its  credit  was  as  unquestioned  as  that  of  the  Bank 
of  England. 

General  Jackson  was  resolved  upon  the  destruction  of  this  institution.  His 
reasons  have  been  variously  stated.  His  enemies  said  then,  and  say  now, 
that  he  destroyed  the  bank  because  he  personally  hated  Nicholas  Biddle,  its 
celebrated  president.  Others  maintain  that  the  destruction  of  the  bank  was 
a  tribute  to  the  known  will  of  a  majority  of  the  people,  who  from  time  imme- 
morial had  distrusted  all  banks,  and  who  in  particular  detested  "  The  Monster," 
as  the  Bank  of  the  United  States  was  then  called  by  its  opponents.  Others 
again,  assert  that  General  Jackson  put  down  the  bank  for  reasons  purely 
patriotic,  because  he  really  thought  the  existence  of  such  a  powerful  moneyed 
institution  dangerous  to  liberty,  and  dangerous  to  the  independence  of  the 
Executive.  The  probabihty  is,  that  all  these  motives  had  weight  with  the 
General.  Whatever  his  motives  may  have  been,  there  is  no  doubt  that  he 
accomplished  his  purpose  with  indomitable  resolution,  and  in  spite  of  obstacles 
that  would  have  deterred  any  man  less  resolute  than  himself.  At  the  present 
time  there  are  few  intelligent  persons  who,  on  a  calm  review  of  the  whole 
transaction,  will  not  admit  that  the  total  separation  of  the  general  govern- 
ment from  banks  and  banking,  is  not  merely  in  accordance  with  the  genius 
of  our  institutions,  but  practically  right  and  wise. 

VETO    OF    THE    RE-CHARTERING    BILL. 

In  1832,  the  charter  of  the  Bank  of  the  United  States  had  four  years  yet  to 
run,  and  a  bill  passed  both  houses  of  Congress  renewing  the  charter.  This 
bill  was  laid  before  President  Jackson  for  his  signature  on  the  4th  of  July, 
and  on  the  10th  of  the  same  month  he  returned  it  to  the  Senate  vetoed !  His 
objections  to  the  bill  were  stated  at  great  length,  but  the  principal  objection 
was  expressed  with  forcible  brevity  at  the  beginning  of  the  message,  as  fol- 
lows : — 

"  The  present  corporate  body,  denominated  '  The  President,  Directors,  and 
Company  of  the  Bank  of  the  United  States,'  will  have  existed,  at  the  time  this 
act  is  intended  to  take  eft'ect,  twenty  years.  It  enjoys  an  exclusive  privilege 
of  banking  under  the  authority  of  the  General  Government,  a  monopoly  of  its 
favor  and  support,  and,  as  a  necessary  consequence,  almost  a  monopoly  of  the 
foreign  and  domestic  exchange.  The  powers,  privileges,  and  favors  bestowed 
upon  it,  in  the  original  charter,  by  increasing  the  value  of  the  stock  far  above 
its  par  value,  operated  as  a  gratuity  of  many  millions  to  the  stockholders. 


REMOVAL  OF  THE  BEPOSITES.  7 

*'  An  apology  may  be  found  for  the  failure  to  guard  against  this  result,  in 
consideration  that  the  effect  of  the  original  act  of  incorporation  could  not  be 
certainly  foreseen  at  the  time  of  its  passage.  The  act  before  me  proposes 
another  gratuity  to  the  holders  of  the  same  stock,  and,  in  many  cases,  to  the 
same  men,  of  at  least  seven  miUions  more,  ^his  donation  finds  no  apology  in 
any  uncertainty  as  to  the  effect  of  the  act.  On  all  hands  it  is  conceded  that 
its  passage  will  increase  at  least  twenty  or  thirty  per  cent,  more,  the  market 
price  of  the  stock,  subject  to  the  payment  of  the  annuity  of  $200,000  per  year, 
secured  by  the  act ;  thus  adding,  in  a  moment,  one  fourth  to  its  par  value. 
It  is  not  our  own  citizens  only  who  are  to  receive  the  bounty  of  our  govern- 
ment. More  than  eight  millions  of  the  stock  of  this  bank  are  held  by 
foreigners.  By  this  act  the  American  republic  proposes  virtually  to  make 
them  a  present  of  some  millions  of  dollars.  For  these  gratuities  to  foreigners, 
and  to  some  of  our  own  opulent  citizens,  the  act  secures  no  equivalent  what- 
ever. They  are  the  certain  gains  of  the  present  stockholders  under  the  oper- 
ation of  this  act,  after  making  full  allowance  for  the  payment  of  the  bonus. 

"  Every  monopoly,  and  all  exclusive  privileges,  are  granted  at  the  expense 
of  the  public,  which  ought  to  receive  a  fair  equivalent.  The  many  millions 
which  the  act  proposes  to  bestow  on  the  stockholders  of  the  existing  bank, 
must  come,  directly  or  indirectly,  out  of  the  earnings  of  the  American  people. 
It  is  due  to  them,  therefore,  if  their  government  sell  monopolies  and  exclusive 
privileges,  that  they  should  at  least  axact  for  them  as  much  as  they  are  worth 
in  open  market.  The  value  of  the  monopoly  in  this  case  may  be  correctly 
ascertained.  The  twenty-eight  millions  of  stock  would  probably  be  at  an 
advance  of  fifty  per  cent.,  and  command  in  market  at  least  forty -two  milhons 
of  dollars,  subject  to  the  payment  of  the  present  bonus.  The  present  value  of 
the  monopoly,  therefore,  is  seventeen  millions  of  dollars,  and  this  the  act  pro- 
poses to  sell  for  three  millions,  payable  in  fifteen  annual  instalments  of 
$200,000  each. 

"  It  is  not  conceivable  how  the  present  stockholders  can  have  any  claim  to 
the  special  favor  of  the  government.  The  present  corporation  has  enjoyed 
its  monopoly  during  the  period  stipulated  in  the  original  contract.  If  we  must 
have  such  a  corporation,  why  should  not  the  government  sell  oftt  the  whole 
stock,  and  thus  secure  to  the  people  the  full  market  value  of  the  privileges 
granted  ?  Why  should  not  Congress  create  and  sell  twenty-eight  millions  of 
stock,  incorporating  the  purchasers  with  all  the  powers  and  privileges  secured 
in  this  act,  and  putting  the  premium  upon  the  sales  into  the  Treasury  ? 

"But  this  act  does  not  permit  competition  in  the  purchase  of  this  monopoly. 
It  seems  to  be  predicated  on  the  erroneous  idea,  that  the  present  stockholders 
have  a  prescriptive  right,  not  only  to  the  favor  but  to  the  bounty  of  the  gov- 
ernment. It  appears  that  more  than  a  fourth  part  of  the  stock  is  held  by 
foreigners,  and  the  residue^  is  held  by  a  few  hundred  of  our  own  citizens, 
chiefly  of  the  richest  class  :  for  their  benefit  does  this  act  exclude  the  whole 
American  people  from  competition  in  the  purchase  of  this  monopoly." 

This  veto  produced  an  intense  excitement  throughout  the  country,  which 
many  of  our  readers  will  remember.  The  arguments  of  Old  Hickory  were 
never  answered,  bnt  he  was  abused  without  stint. 

REMOVAL  OF  THE  DEPOSITES. 
The  failure  of  the  Bank  of  the  United  States  to  obtain  a  renewal  of  its  char- 
ter produced  no  immediate  effect  upon  the  finances  of  the  country.  The  Bank 
had  four  years  in  which  to  wind  up  its  affairs,  and  under  so  accompHshed  a 
financier  as  Nicholas  Biddle,  it  no  doubt  might  have  transferred  its  business 
gradually  to  other  institutions,  and  gone  out  of  existence  without  seriously  dis- 


8  THE  INFLATION  OF  1885-36. 

turbing  the  monetary  affairs  of  the  nation.  But  General  Jackson's  next  blow 
struck  home.  Re-elected  in  1832  on  the  bank  issue,  and  in  spite  of  the  Bank's 
active  opposition,  he  was  no  sooner  inaugurated,  than  he  resolved  upon  his 
great  stroke  of  removing  the  pubhc  money  from  the  custody  of  the  United  States 
Bank,  and  distributing  it  among  the  local  banks  of  the  several  States  of  the 
Union.  In  the  fall  of  1833,  no  less  than  eight  miUions  of  the  public  money 
were  thus  removed  from  the  vaults  of  the  great  Bank.  The  effect  was  imme- 
diate and  disastrous.  The  Bank,  shorn  of  so  much  practical  capital,  was  com- 
pelled to  curtail  its  discounts  to  such  an  extent  as  to  render  money  for  a  few 
months  exceedingly  tight.  There  were  many  failures.  In  a  short  time,  how- 
ever, the  distributed  capital  began  to  tell,  and  an  enormous  expansion  of  the 
currency  set  in,  which  not  only  reheved  the  business  world  from  its  embarrass- 
ments, but  gave  an  inflation  to  the  affairs  of  the  country  of  an  unparalleled 
character.  State  banks  were  created  all  over  the  country,  and,  governed  as 
most  of  them  were  by  men  unexperienced  in  banking,  they  were  easily  drawn 
into  the  seductive  snare  of  excessive  issues  of  paper. 

THE    INFLATION    OF    1835-36. 

In  England : — The  joint  stock  banks  had  increased  with  startling  rapidity. 
They  had  begun  in  1825,  and  in  September  1835,  they  numbered  102,  exclu- 
sive of  an  immense  number  of  branches.  During  the  preceding  five  months 
they  had  been  increasing  at  the  rate  of  five  per  montn,  exclusive  of  branches; 
yet  there  was  but  a  comparatively  small  increase  of  their  notes — then  whence 
the  enormous  profits  they  were  known  to  make  ?  It  was  by  means  of  bank 
credits.  Tbey  were  in  the  habit  of  sending  the  paper  they  discounted  imme- 
diately dp  to*London  to  be  re-discounted  there,  thus  banking  to  an  indefinite 
extent  oii  credit.  *'To  such  an  extent,"  said  the  Edinburgh  Review  for  July, 
1836,  "had  this  system  been  carried,  that  we  are  weU  assured  that  certain 
banks,  with  less  than  £500,000  of  paid  up  capital,  have  discounted  bills  and 
made  advances  to  the  extent  of  from^?;<3  to  six  miUions;  and  the  engagements 
of  others  have  been  even  more  incommensurate  with  their  capital."  The  con- 
sequence of  this  state  of  things  was,  that  during  the  first  three  months  of  1836, 
one  hundred  and  four  joint  stock  companies  were  formed  in  Manchester  and 
Liverpool  alone,  with  an  aggregate  capital  of  £3*7, 987, 500  ;  and  Mr.  Poulett 
Thompson  stated  in  the  House  of  Commons,  that  the  number  of  fresh  compa- 
nies on  the  tapis,  for  every  imaginable  object,  from  making  railways  in  Hin- 
dostan  to  burying  the  dead  at  home,  were  between  three  and  four  hundred, 
with  an  aggregate  projected  capital  of  nearly  two  hundred  millions  sterling. 

In  the  United  States ;— The  inflation  is  too  well  remembered  among  us  to 
require  an  enlarged  statement  here.  Suffice  it  to  say,  that  the  country  lost  its 
senses  in  its  haste  to  be  rich.  The  credit  system  was  carried  to  an  extent 
which  those  who  can  remember  the  facts'can  scarcely  beheve.  Men  without 
a  thousand  dollars  of  capital  bought  cotton  plantations  and  slaves,  and  drew 
on  brokers  immediately,  on  the  credit  of  the  first  crop,  before  the  seed  had 
been  sown.    Land  speculation  was  the  rage.    Millions  of  acres  of  land,  which 


BANKS  AND  BANKING  CAPITAL. 


9 


were  valued  at  prices  ranging  from  one  hundred  dollars  to  a  thousand  dollars 
an  acre,  have  not  yet  reached  the  value  at  which  they  were  then  sold  and  re- 
sold. The  walls  of  the  streets  were  covered  with  maps  of  towns  that  were  still 
miles  in  the  woods  or  feet  under  water.  AIL  this  will  be  brought  out  fully  in 
another  chapter. 

Comparative  view  of  Imports  into  the  United  States,  and  Exports  to  Foreign 
Countries  for  13  years. 


V/^or. 

Imports. 

Exports  of  Domestic 

Total 

xear. 

Produce  &  Articles. 

Exports. 

1824 

$80,549,007 

$50,649,500 

$75,986,657 

1825 

96,340,075 

66,944,745 

99,535,388 

1826 

84,974,477 

53,055,710 

77,595,322 

1827 

79,484,068 

58,921,691 

82,324,827 

1828 

88,509,824 

50,669,669 

72,264,686 

1829 

74,492,527 

55,700,193 

72,358,671 

1830 

70,876,920 

59,462,029 

73,849,508 

1831 

103,121,124 

61,277,027 

81,310,583 

1832 

101,029,266 

63,137,470 

87,176,943 

1833 

108,118,311 

70,317,698 

90,140,433 

1834 

126,521,332 

81,024,162 

104,336,973 

1835 

149,895,742 

101,189,082 

121,693,577 

183d 

189.980,035 

106,916,680 

128,663,040 

TABLE    OF    BANKS  AND    BANKING    CAPITAL    IN   THE   UNITED    STATES 

FROM  1792  TO  1836. 


Year 

Banks 

U.  S.  Bank 

Total  Capital 

1792 

12 

$10,000,000 

$18,935,000 

1801 

33 

do 

33,550,000 

1805 

76 

do 

50,493,000 

1811 

89 

do 

52,610,600 

1815 

208 

Defunct 

82,209,590 

1816 

246 

do 

89,802,422 

1820 

308 

35,000,000  ■ 

137,210,611 

1830 

330 

do 

145,192,268 

1834 

507 

do 

205,123,788 

1835 

558 

do 

231,250,337 

1836 

567 

do 

251,875,292 

1837 

677 

do 

378,421,168 

I 


STRIKES    AND    TRADE    UNIONS.  . 

As  the  manufacture  of  paper  money  proceeded,  provisions  and  other  neces- 
saries of  life  rose  in  price,  and  mechanics  universally  demanded  higher  wages. 
Strikes  were  the  order  of  the  day.  We  read  in  the  Journal  of  Commerce  of 
Feb.  1836,  as  follows  : 

'*  On  the  23rd  inst.,  the  Riggers  and  Ship-laborers  turned  out  in  large  num- 
bers, and  went  about  the  wharves  in  a  body,  compelling  such  of  their  profes- 
sion as  they  found  at  work,  to  quit  the  business  in.  which  they  were  engaged. 
Almost  simultaneously  a  squad  of  day-laborers,  of  another  description,  chiefly 
foreigners,  went  through  the  burnt  district  compelling  their  fellow-laborera 
about  the  premises  to  quit  work,  because  they  were  receiving  $1  a  day  instead 


10  STRIKES  AND  TRADE  UNIONS. 

of  $1  25,  which  these  imported  dictators  had  determined  was  the  rightful 
sum." 

In  the  N.  Y.  American,  of  about  the  same  date,  we  find  the  following : — 

"  A  sea-faring  man,  from  exposure  to  severe  weather,  was  on  his  arrival  in 
port  sent  to  the  city  hospital,  where  his  general  health  was  restored,  but  both 
feet  were  lost.  Being  cured,  he  could  no  longer,  by  the  rule  of  the  hospital, 
be  kept  there ;  yet  to  send  him  forth  such  a  cripple,  was  to  consign  him  to 
starvation.  Some  of  the  governors,  therefore,  caused  artificial  feet  to  be 
made  for  him  at  a  cost  of  70  dollars,  and  then,  as  he  said  he  had  been  ac- 
customed on  ship-board  to  handle  the  sail-needle,  obtained  employment  for 
him  with  a  sail-maker,  and  placed  him  in  special  charge  of  the  foreman  of  the 
loft,  with  the  request  that  he  might  be  suffered  to  earn  whatever  he  could. 
The  cripple,  happy  and  grateful,  went  to  his  new  trade,  and  for  two  days  was 
unmolested,  as  was  his  employers ;  and  it  was  ascertained  that  by  such  work 
he  could  earn  enough  to  keep  him  above  want.  On  the  third  day,  a  deputa- 
tion from  the  Trades'  Union  went  to  the  sail-loft — forbade  the  employment  of 
that  helpless  sailor — forbade  him,  in  like  manner,  to  work — and  he  was  obliged 
to  relinquish  the  place.  The  governors  of  the  hospital  received  him  back 
within  their  walls,  or  he  would  have  been  left  without  a  meal,  or  a  place  to 
lay  his  head." 

We  add  one  more  case.  "In  March,  1836,  a  number  of  Journeymen  Gran- 
ite Cutters,  nd^t  members  of  the  Union,  were  obliged  to  combine  in  order  to 
protect  themselves  against  its  machinations.  In  their  Manifesto  they  declare 
that  the  Unions  had  formally  proscri];)ed  all  journeymen  who  refused  to  join 
or  co-operate  with  it — had  undertaken  to  prevent  such  journeymen  from  ob- 
taining employment  in  any  town  in  the  United  States  where  Trades'  Unions 
were  established — had,  to  use  their  own  phrase,  nullified  two  Yards,  because 
their  proprietors  had  refused  to  discharge  a  foreman  at  the  bidding  of  the 
Union — had  threatened  death,  tar  and  feathers,  battery,  and  every  species  of 
personal  indignity,  to  those  who  might  presume  to  labor  in  those  Yards — and, 
to  intimidate  strange  journeymen,  had  declared,  that  unless  they  acquiesced, 
they  would  forever  be  objects  of  persecution — had  seduced  apprentices  from 
the  nullified  Yards,  and  forced  them  as  journeymen  upon  others — and  that 
such  proceedings  had  caused  contracts  to  the  amount  of  $260,000  to  be  re- 
moved to  other  States." 

To  show  the  angry  spirit  that  prevailed  at  that  time  of  universal  prosperity, 
we  copy  another  case  from  the  Journal  of  Commerce  : 

"  Some  days  back,  the  journeymen  tailors  made  out  a  new  tariff  of  prices 
to  be  paid  by  their  employers,  and  also  laid  down  certain  rules  relative  to  the 
manner  in  which  master-tailors  should  give  out  work.  According  to  one  of 
these  rules,  every  master  tailor  should  keep  a  slate  hung  up  in  his  store,  and 
enter  on  it  every  piece  of  work  which  he  gave  to  a  journeyman  to  make,  and 
that  no  journeyman  should  get  work  to  do  except  in  his  turn.  For  example, 
if  two  journeymen  successively  got  each  a  coat  to  make,  and  the  one  who  re- 
ceived the  second  was  more  industrious  than  the  first,  or  a  more  expeditious 
tvorkman,  and  finished  his  work  sooner,  he  must  wait  idle  until  the  other  man 
had  also  finished  his  work  and  was  given  another  job.  So  that  the  idle  and 
industrious,  or  awkward  and  expert  workman  were  completely  on  a  par  by 
these  absurd  regulations — to  the  monstrous  injustice  of  the  operative,  and 
serious  inconvenience  and  loss  of  the  employer.  The  master-tailors  very  pro- 
perly refused  to  adopt  so  ridiculous  a  rule,  or  comply  with  the  new  scale  of 
prices  dictated  by  the  journeymen,  and  the  latter  very  generally  turned  out, 
and  refused  to  work.  Some  of  the  journeymen  tailors,  however,  were  willing 
to  work  at  the  old  prices,  and  among  them  was  a  man  named  William  Wright, 


STRIKES  AND  TRADES  UNIONS.  11 

in  the  employment  of  Messrs.  Stokes  &  Co.,  Broadway.  This  man  could  earn 
twelve  dollars  a  week,  and  having  a  large  family  to  support,  was  unwilling  to 
remain  idle,  but  was  obliged  to  do  so  from  downright  fear,  as  some  of  the 
other  journeymen  tailors  called  on  him,  and  threatened  him,  that  if  he  did  not 
leave  his  employment  they  would  cut  off  his  hands  or  kill  him  I  Intimidated 
by  these  threats,  Wright  left  his  work  ;  a:^d  his  employers,  in  whose  service 
he  had  been  for  many  years,  and  who  had  a  great  respect  for  him,  having  dis- 
covered that  he  left  them  solely  from  intimidation,  determined  to  prosecute 
the  lawless  ruffians  who  had  driven  him  away,  and  summoned  Wright  to  the 
police  office  yesterday  evening  in  order  to  obtain  his  testimony  against  them. 
Such  a  complete  system  of  terror,  however,  have  the  journeymen  tailors  es- 
tablished in  their  body,  that  Wright  was  afraid  to  tell  the  names  of  any  of  the 
aggressors,  and  though  Mr.  Wyman  said  all  he  could  to  persuade  hira  to  it, 
promising  him  full  protection  against  any  consequences,  Wright  still  dechned 
mentioning  any  names,  lest  his  doing  so  might  cause  his  destruction.  Finding 
that  threats  or  promises  were  alike  unavailing,  Mr.  Wyman  was  obliged  to 
commit  him  to  prison  for  refusing  to  give  evidence  ;  and  thus  an  honest,  in- 
dustrious, poor  man,  with  a  large  family,  has  been  obliged  first  to  remain  idle, 
and  is  afterwards  committed  to  prison  for  fear  of  disobeying  the  dictates  of  a 
lawless  combination." 

The  following  advertisement  from  the  papers  of  the  same  date,  is  also  sig- 
nificant : 

"  The  public  in  general,  and  my  binders  in  particular,  are  hereby 
informed  that  I  have  now  at  work  four  and  twenty  good  permanent  workmen, 
and  several  more  engaged. to  commence  on  the  1st  of  May,  all  of  whom  are 
little  affected  with  the  brutal  leprosy  of  Blue-Monday  habits,  and  the  moral 
gangrene  of  Trades'  Union  principles.  Hence,  my  binders  may  rely  upon 
steady  employment,  and  the  pubhc  upon  good  work,  punctually  performed ; 
and  they  and  myself  find  just  cause  to  fehcitate  ourselves  upon  the  prompt 
and  effectual  disposal,  at  once  and  forever,  of  the  inconvenience,  injustice  and 
nuisance  of  perpetual  variations,  regular  combinations,  and  periodical  strikes 
from  marauding  gangs  of  transient  and  tramping  Trades'  Unionists,  who  have 
proved  themselves  as  destitute  of  every  moral  principle  as  they  have  become 
notorious  for  their  wickedness  and  folly,  their  presumption,  their  insolence 
and  audacity. 

"HORACE  H.  DAY, 

"  Shoe,  Hat  and  Cap  Manufacturer. 

*'  Neio  Brunswick^  April  6,  1836." 


CHAPTER  III. 

DISASTERS   JUST   PREVIOUS   TO  THE   GREAT   REVULSION    OF    1837. 

The  reader  will  bear  in  mind  that  the  year  1835  was,  so  far  as  appearances 
went,  the  most  buoyant  and  prosperous  year  which  the  business  men  of  the 
United  States  had  ever  known.  The  country  was  in  the  very  highest  spirits. 
If  ever  a  warning  voice  was  heard,  it  was  not  heeded,  and  the  very  prophets 
themselves  scarcely  believed  their  own  predictions.  Nowhere  was  the  infla- 
tion of  credit  carried  to  a  greater  extent  than  in  the  city  of  New  Yojk.  New 
blocks  of  costly  houses  were  erected,  and  that  imposing  and  magnificent  region 


12  THE  GREAT  FIRE  OF  1835. 

which  we  now  call  "Up-Town,"  was  beginning  to  rise,  like  an  exhalation,  from 
a  wilderness  of  rock,  sand  and  shanty.  Extravagance  was  the  order  of  the 
day, — extravagance  in  business,  in  speculation,  in  expenditure,  and  in  talk. 
"  In  1834,"  said  a  newspaper  of  the  time,  "  the  current  increased.  The  new 
squares  up-town  were  built— great  profits  made  in  lots  near  town — speculation 
began  also  in  the  South — cotton  culture  increased.  In  1835  the  madness 
made  further  progress,  and  continued  increasing  up  to  1836,  in  July,  when  it 
had  reached  its  height.  In  the  course  of  these  events,  prices  of  everything 
increased — of  lands,  cotton,  provisions — every  article  of  necessity  and  use." 
We  now  commence  our  catalogue  of  disasters  with 

THE   GREAT    FIRE    OF    1835. 

To  convey  to  our  younger  readers  a  vivid  idea  of  this  great  calamity,  which, 
in  the  space  of  about  twenty-two  hours,  destroyed  seventeen  blocks  of  postly 
stores,  we  cannot  do  better  than  copy  the  following  account  from  "  Watson^s 
Annals  of  Neiju  York  ;" 

"  The  great  conflagration  of  New  York  city,  in  December,  1835, — the 
greatest  wonder  and  calamity,  and  befalling  the  greatest  city,  hitherto  known 
to  the  Western  world, — were  subjects  of  sufficient  excitement  and  interest,  to 
induce  a  journey  in  mid-winter,  purposely  to  visit  the.  ruins,  and  to  see  the 
havoc  and  desolation  which  the  devouring  element  had  inflicted. 

"  Such  a  scene  of  devastation  can  only  be  expected  to  occur  once  in  a  cen- 
tury, or  but  once  in  a  life ;  and  when  the  spectacle  once  got  up^  is  showed  off 
at  such  tremendous  expense,  and  with  such  terrific  display,  it  must  surely  be 
worth  a  journey  of  observation  'to  note  and  observe!'  Such  thoughts  in- 
fluenced my  mind,  and  induced  the  visit  to  the  scene  of  destruction,  on  Christ- 
mas-day, the  25th  of  December,  1835,  being  eight  days  after  the  disaster  had 
closed  its  career  of  ravage  and  dismay. 

"  On  my  arrival  .in  the  city  of  New  York,  my  first  impulse  was  to  inspect 
the  awful  ruins.  In  doing  so,  I  was  necessarily  obliged  to  see,  beforehand, 
the  persons  of  numerous  citizens  at  the  wharves  and  along  the  streets.  Their 
faces  nor  actions,  indicated  none  of  those  excited  feelings,  which  my  own 
.  emotion  might  have  suggested  as  very  natural  from  the  occasion.  Indeed,  it 
was  but  too  true,  that  the  wonder  of  the  occasion  had  much  subsided ;  and 
this  agreed  with  the  fact  before  observed,  in  the  intermediate  journey,  that 
the  mass  of  traveUing  passengers — equal  to  150  persons,  had  already  found 
out  other  topics  of  conversation  and  interest. 

"  Soon,  however,  I  entered  upon  the  »cene  of  ruin,  and  oh !  what  a  scene 
— to  comprise  an  area  of  forty -five  city  acres,  in  absolute  destruction.  To  see 
still  the  charred,  the  blazing  and  smouldering  embers,  to  scent  the  tainted  air 
loaded  with  smoke  from  the  still  consuming  parcels  of  cotton,  coffee,  tobacco, 
tea,  cotton  and  woollen  goods,  still  resting  in  cellars,  covered  with  masses  of 
bricks  and  broken  granite.  Of  628  buildings  of  the  most  costly  fabric,  of  four 
and  five  stories  height,  which  were  consumed,  only  one^  a  conspicuous  Sala- 
mander^  was  remaining ; — Benson's  fire-proof  copper  store,  of  four  stories, 
upon  No.  83  Water  street.  There  it  stood  unscathed,  an  Oasis  in  the  sur- 
rounding desert. 

"  It  was  passing  strange,  to  contemplate  in  one  view,  so  great  a  mass  of 
towering  architecture  as  528  houses  of  brick  and  granite,  all  prostrated^  all 
gone  down  into  their  own  tombs,  in  their  several  cellars ;  or  in  some  cases 
tumbling  into  the  narrow  streets,  and  clogging  up  their  passage.  Here  and 
there,  were   to  be  seen  craggcd  and  dofornicd  fraficmenls  of  standing  walls, 


THE  GKEAT  FIKE  OF  1835.  13 

some  of  one  story — some  more  slender  and  lofty,  of  two  and  three  stories, 
acting  as  pointers  and  indices  to  the  ruined  area,  and  warning  the  inquisitive 
explorer  like  myself,  to  beware  of  coming  within  the  verge  of  their  expected 
fall.^  On  some  they  had  fallen  and  broken  limbs,  even  while  I  was  there. 
Amid  these  ruins,  guided  by  the  remains  of  the  several  former  streets,  were 
to  be  seen  continuous  Hues  of  male  and  -ifemale  passengers,  come  in  hoHday 
clothes  from  country  villages,  to  behold  the  catastrophe.  I  speak  of  them 
generally  as  strangers  ;  for  in  truth,  as  I  afterwards  ascertained,  the  proper 
inhabitants  of  New  York  had  already  ceased  to  visit  the  place,  as  an  affair  of 
worn-out  character,  superseded  by  something  more  recent  and  of  fresher 
news.  Even  as  I  overheard  some  gentlemen  near  the  place,  conversing  and 
saying,  that'  "  usually  their  occasions  of  excitement  lasted  twenty-four  hpurs ; 
but  here  was  one  of  thirty-eight  hours,  and  now  no  longer  such."  Trtly,  this 
destruction  has  fallen  upon  men  of  peculiar  elasticity  of  spirit  and  enterprise. 
It  is  almost  wholly  upon  the  mercantile  class,  accustomed  to  risk  and  chance, 
and  who  are  habituated  to  recover  from  mishaps  and  disasters.  They  were 
very  generally  insured;  and  so  generally  too,  that  the  chief  of  their  present 
concern,  is  the  probability  of  the  Insurance  companies  being  unable  to  divide 
more  than  an  average  of  fifty  per  cent.  Yet  losing  as  they  must,  there  is  no 
betrayal  of  heart-sorrow  in  the  countenances  of  the  street  walkers,  nor  in  the  , 
congregations  of  the  churches.  They  still  look  wholly  like  their  former-selves,  ' 
—yea  more,  they  even  give  to  other  charities  ;  for  instance,  at  Dr.  Brodhead's 
church  where  I  was,  they  gathered  in  the  annual  collection  for  missionary 
purposes  820  dollars.  ,It  is  probable  that  two-thirds  of  all  the  famihes  in  New- 
York,  might  themselves  become  hberal  contributors  to  the  sufferers. 

"  I  visited  the  ruins  both  by  day  and  by  night,  spending  in  such  observations 
from  one  to  two  hours  at  a  time.  It  was  sad  to  see  the  cartloads  of  goods, 
which  could  even  at  the  end  of  a  week  or  ten  days  after  the  fire,  still  be 
rescued  from  the  heated  cellars.  Thus  great  piles  of  ready  roasted  coffee  was 
brought  out ;  piece  after  piece  of  caHcoes  and  worsted,  scorched  and  smoking, 
were  drawn  out  of  others ;  piles  of  prepared  tobacco  for  chewing ;  numerous 
pigs  of  lead ;  masses  of  bar  iron,  and  iron  chains  ;  cotton  in  bales,  burning  in 
places  and  extinguished  in  others ;  laboring  men,  all  dingy  with  the  smut  of 
the  fire,  working  in  many  places  to  clear  away  the  rubbish  and  to  still  preserve 
something  from  the  flames. 

"  The  best  and  most  extensive  perspective  view  of  the  whole  area,  was  to 
be  seen  from  Coenties  slip,  looking  thence  across  to  the  line  of  Wall  street 
as  &  back  ground.  I  was  so  impressed  with  the  utility  of  preserving  such  a 
spectacle  for  people  at  a  distance,  and  for  posterity,  that  I  immediately  sug- 
gested to  Col.  Stone,  the  editor  of  the  '  Commercial  Advertiser,'  that  a  call 
should  be  made  for  some  one  or  two  hthographic  views  of  the  scene ;  and 
after  I  returned  home,  I  directly  prompted  Mr.  Breton  to  go  on  and  endeavor 
to  execute  them.  He  agreed,  but  soon  after  declined,  because  of  the  proposed 
diorama  of  the  same  by  Wright.     Still,  however,  the  print  is  a  desideratum. 

"  The  lurid  glare  of  the  night  spectacle,  seen  as  I  saw  it  on  the  28th  of 
December,  just  before  daylight,  was  awfully  impressive.  Fires  of  smaller  di- 
mensions could  be  seen  every  here  and  there,  of  goods  still  consuming,  and  afford- 
mg  enough  of  illumination  amidst  the  general  gloom,  to  show  the  explorer  his 
path-way  along  the  former  streets.  How  different  the  quiet  and  desolate 
scene,  from  its  recent  busy  mart  of  commerce.  I  met  no  individual,  heard  no 
voices,  and  had  the  whole  silence  and  soHtude  to  myself.  I  sat  upon  a  heap 
of  ruins  near  to  a  warming  fire,  and  indulged  in  reveries  and  musings.  1 
thought  of  ^'yre  of  old,  "whose  merchants  were  princes,  and  whose  mansions 
were  palaces:'  I  thought  of  the  quickening  influences  of  commerce  wherever 
they  are  freely  indulged  and  not  ignorantly  fettered.  I  thought  then  of  the 
unwise  system  which  denied  to  foreign  underwriters,  (like  the  Phoenix  Com- 
pany, of  London,)  the  risk  of  our  preservation,  and  reserved  to  tJ^emselves  the 


14  THE  GREAT  FIRE  OF  1835. 

sole  privilege  of  being  responsible  for  the  calamities  of  their  own  people. 
The  practical  issue  is,  that  the  ruin  of  seventeen  millions  of  property, 
is  a  family  concern  of  a  ivhole  city^  wherein  all  are  mediately  or  immediately 
involved. 

"  Although  I  had  not  seen  the  actual  conflagration  which  began  at  Comstock 
and  Andrews'  store,  on  Merchant  street,  on  the  night  of  Wednesday,  the  16th 
of  December,  and  raged  through  all  the  next  day  until  Thursday  evening,  I 
could  still  imagine  the  terrific  and  appalling  picture : — 

'  Could  see  her  flames  from  lofty  mansions  rise, 
And  send  their  eddying  columns  to  the  skies  ; 
Where  spreading  fire  makes  night  a  brighter  day, 
Nor  skill  nor  courage  can  its  fury  stay — 
The  richest  merchandize  of  eveiy  name, 
•  The  worth  of  millions  feed  the  flame, 

'  And  one  vast  ruin  meets  the  aching  eye.' 

"  In  the  time  of  the  fire,  when  dismay  and  confusion  were  at  their  utmost 
heif'ht,  great  prices  were  offered  and  given  for  help  in  any  needed  form. 
Twenty  dollars  were  given  for  a  single  cart  load,  and  even  one  hundred  dollars 
was  asked  and  given.  One  merchant  on  South  street,  by  the  river  side,  who 
saw  the  high  extortion  on  those  who  had  not  their  own  carmen  at  hand,  offered 
and  actually  purchased  a  horse  and  cart  for  five  hundred  dollars,  and  thereby 
saved  his  o'wn  property  of  $80,000  by  removal.  My  friends  Clark  and  Smith, 
offered,  after  the  fire  had  consumed  their  store,  one  hundred  dollars  to  sundry 
bystanders,  working  men,  to  pull  out  their  iron  chest ;  it  was  soon  done,  and 
their  books  and  even  notes,  were  all  saved,  although  so  charred  and  injured, 
as  to  be  necessary  to  transcribe  the  books. 

"  It  might  surprise  many  to  learn,  that  while  I  and  others,  travelled  to  the  scene 
from  10(?miles,  that  there  were  numerous  persons  even  in  New  York  city,  who 
never  waked  or  heard  of  the  fire.  My  own  kinsman,  Mr.  B.  up  town,  heard 
of  some  cry  of  fire  about  the  time  of  his  retiring  to  bed,  but  Uttle  regarded 
It ;  and  he  and  his  wife  and  two  servants,  actually  slept  out  the  whole  night 
in  Bleecker  street,  without  knowing  that  there  had  been  any  tire,  and  that  he 
had  actually  lost  a  large  store  worth  $2500  a  year  rent. 

"  Some  others  of  my  friends,  near  Houston  street  and  Broadway,  were  at 
a  wedding  party,  and  although  they  heard  of  the  fire  at  a  distance  at  nine 
o'clock,  not  one  of  them  left^heir  entertainment  till  midnight;  and  then  only 
one  of 'them  on  his  nearer  approach  homeward,  saw  or  heard  enough  of  the 
fire  to  influence  him  to  go  on  to  the  place  of  desolation— there  in  his  gala 
dress  and  dancing  pumps,  he  had  to  set  to  work  earnestly  to  pack  up  his  store 
goods  near  the  Exchange,  and  send  them  to  the  Battery  ground  for  safety- 
he  eventually  lost  $2000.  Three  of  the  other  guests  went  home  to  rest,  and 
never  heard  of  their  losses  until  the  next  morning,  when  they  found  that 
their  stores  and  all  their  contents  were  dissolved  in  fervent  heat. 

"  It  is  the  strangest  thing  to  contemplate,  that  nearly  600  houses  of  the 
loftiest  and  most- expensive  construction,  should  go  down  to  absolute  ruins  in 
so  short  a  space  of  time.  One  would  think  that  the  bare  walls  might  be  found 
standing  ;  but  it  was  not  so.  It  is  said  that  they  build  with  insufficient  width 
of  wall  for  such  large  superstructures  of  four  and  five  stories  ;  and  above  all 
that  the  cheaper  Ume  which  they  have  preferred  from  Maine,  Rhode  Island, 
and  Albany  &c.,  has  been  wholly  unequal  to  that  which  Philadelphia  county 
supplies  to  its  architecture.  The  granite  and  marble  pillars  on  which  many 
of  the  fronts  of  the  houses  rested,  were  wholly  unable  to  sustain  the  action  of 
fire  and  water;  2iVidi  fractured  and  rived  m  such  manner,  as  to  be  no  support 
to  the  walls  above  them.  The  narrowness  of  the  streets,  and  the  undue  ele- 
vation of  the  houses,  (a  sufficient  warning  to  us,)  prevented  firemen  froin  act- 
ine;  with  effect.  These  circumstances,  while  they  hindered  men  from  aiding, 
greatly  increased  the  action  of  the  heat,  so  that  such  an  intensity  of  fire  has 


THE  GREAT  FIRE  OF  1835.  15 

never  been  surpassed.  I  saw  china  stores,  where  the  masses  of  broken  china 
was  vitrified  in  clusters,  zinc  and  copper,  from  roofs,  was  found  in  the  drench- 
ing form  of  gushing  water,  the  masses  of  nails,  screws,  &c.,  in  iron  stores, 
were  partially  dissolved,  and  then  cooled  in  union.  I  preserved  some  such 
fragments,  and  I  also  brought  away  a  whole  ewer,  which  had  endured  all  the 
fire,  at  the  china  store  of  John  Greenfield  and  'Sons,  in  Pearl  street,  close  to 
where  a  china  store  was  blown  up,  and  caused  the  arrest  of  the  fire  at  the 
head  of  Coenties  shp,  on  Pearl  street. 

"The  cause  of  so  much  unparallelled  havoc,  was  that  of  a  fierce  wind — felt 
equally  all  the  way  to  Philadelphia,  which  was  blowing  from  the  north-west 
during  all  the  night ;  and  besides  this,  the  weather  was  too  intensely  cold,  to 
admit  of  a  due  use  of  the  engines  and  hose.  In  many  places  firemen  could  be 
seen  beating  their  hose  to  prevent  the  formation  of  ice  within  them. 

"  It  was  impossible  to  find  firemen  reckless  enough  to  ascend  ladders,  which 
might  be  raised  to  the  eves  of  houses,  of  four  and  five  stories — and  in  narrow 
streets,  the  water  played  so  high,  necessarily  fell  back  upon  the  people  below. 
In  such  extremities,  men  had  to  stand  useless  gazers  upon  the  destruction  of 
their  property. 

"  Seventeen  blocks,  (squares,)  containing  houses  of  the  largest  and  most 
costly  construction,  were  consumed  in  one  night.  What  an  awful  picture  of 
the  Great  Assize,  *  when  the  elements  shall  melt  with  fervent  heat!' 

'*  Explosions  were  often  heard,  resulting  sometimes  purposely  from  the  use 
of  gunpowder,  and  in  otiier  cases  from  the  bursting  of  liquor  casks,  and  from 
the  presence  of  gunpowder  held  for  sale.  These,  when  they  occurred,  were 
subjects  of  indescribable  grandeur  and  terror — it  set  every  bosom  upon  the 
qui  vive. 

"  How  wonderful,  that  in  so  much  just  cause  of  personal  apprehension  and 
danger,  only  one  person  should  have  been  wounded,  and  one  other  missing. 

"  It  was  somewhat  peculiar  that  the  fire  travelled  so  readily  to  loindward^  so 
that  those  who  conveyed  their  goods  and  stored  them  for  safety  in  the  Mer- 
chants' Exchange  and  the  old  Dutch  church,  should  have  had  them  overtaken, 
even  there,  by  the  consuming  element,  and  wholly  burned.  The  best  refuge 
was  found  in  the  Bowling  Green  and  Battery,  where  marine  guards  with  fixed 
bayonets,  gave  them  protection. 

"The  several  streets,  after  the  fire,  were  seen  for  several  days,  choked  up 
with  rich  merchandizes — all  tramped  under  foot,  and  almost  totally  ruined. 
In  short  thousands  upon  thousands  of  dollars  in  value,  were  lying  wasted  and 
whelmed  in  ruin. 

"  Wail  after  wall,  were  seen  or  heard  tumbling  Hke  avalanches  to  the  ground, 
while  flames  were  darting  their  tongues  of  fire,  and  were  heard  roaring  from 
roofs  and  windows,  along  whole  streets.  At  the  same  time,  firemen  worn  out 
with  over  exertion,  were  still  struggling  for  mastery  over  the  storm  of  fire, 
which  seemed  to  revel  in  its  power,  and  to  mock  all  human  skill  and  prowess. 

"  The  next  day,  all  the  city  military  were  put  under  requisition,  to  be  ready 
to  protect  property  exposed,  and  to  aid  the  civil  authorities  in  the  preserva- 
tion of  order  and  the  civil  rule. 

*'  It  was  curious  to  see  occasionally,  the  harvest  which  occurred  to  the  poor, 
and  to  stroUing  boys  and  girls.  You  could  see  the  rag  gatherers,  crowding 
their  sacks  with  scorched  fragments  of  cotton  and  silk  stufts.  In  one  place 
was  the  remains  of  a  jeweler's  store,  in  which  ragged  boys  and  girls  were  very 
busy  searching  for  sundry  trinkets.  At  the  china  stores,  men,  women,  and 
children,  were  engaged  raking  among  broken  china  and  queensware,  for  small 
articles  unbroken.  In  one  such  place,  I  saw  and  purchased,  as  a  relic,  an 
ewer  in  good  state.'* 

The  most  wonderful  circumstance  respecting  this  Great  Fire  was,  that  it 
caused  scarcely  any  failureSj  and  seemed  to  produce  no  serious  effect  upon 


16  THE  GREAT  FIRE  OF  1S85. 

either  the  progress  of  the  city  or  the  finances  of  the  country.  The  city  was 
under  such  tremendous  headway,  that  the  sudden  and  total  annihilation  of 
eighteen  millions  of  property  was  hardly  felt.  Every  body  was  amazed  at 
this.  It  hugely  flattered  the  nationul  vanity.  In  what  other  country,  asked 
the  elated  people,  could  such  a  catastrophe  occur,  without  bringing  ruin  upon 
all  concerned  ?  528  houses  were  consumed.  On  the  1st  of  October  1836, 
167  houses  on  the  burnt  district  were  occupied  ;  58  more  were  finished ;  64 
more  were  roofed ;  82  more  were  in  progress,  and  nearly  every  trace  of  the 
.fire  was  obHterated.  As  a  very  striking  proof  of  the  elasticity  of  things  at 
that  time,  note  the  annexed  account  of  sales  of  real  estate  by  Jas.  Bleecker  & 
Sons,  Feb.  23,  1836 — at  their  sales  room,  13  Broad  street.  The  real  estate 
of  the  late  Joel  Post. 

1  lot  on  Wall  street,  corner  of  Exchange  place,  28  feet  6  inches  by  63  feet 

6  inches  -         -         -         -         $66,500 

1  lot  on  Wall  street,  adjoining  above,  19  feet  by  28  feet,  .  -  55,750 
1   lot  on  Exchange  street,  30  feet  5  inches  by  54  feet,  -         -  46,500 

1  lot  on  Exchange  street,  29  feet  7  inches  by  52  feet  9  inches,  -  41,000 
1  lot  on  Exchange  street,  20  feet  4  inches  by  45  feet  deep,  running  to 

a  point, 18,100 

1  lot  corner  of  William  street  and  Exchange  place,  25  feet  11   inches 

by  52  feet  5  inches,  -.-_...._     46,500 

1  lot  next  but  one  adjoining,  39  feet  2  inches  by  40  feet,  -  -  38,750 
1  lot  on  William  street,  next  to  corner  of  Wall  street,  17  feet  2  inches 

front,  11  feet  rear,  and  60  feet  deep,  ....  25,000 

1  lot  on  Exchange  Place,  32  feet  9  inches  front  by  55  feet  deep,  36,500 

1  lot  adjoining,  26  feet  2  inches  by  66  feet,  ....         28,250 

1  lot  in  rear  on  Merchant  street,  23  feet  6  inches  by  52  fact,  24,250 

1  lot  fronting  on  Exchange  Place  and  Merchant  street,  20  feet  5  inches 

by  91  feet, 45,500 

1  lot  20  feet  6  inches-23  feet,  by  88  feet,  ....         47,500 

1  lot  adjoining,  20  feet  6  inches-24  feet,  by  75  feet,  -         -  38,500 

1  lot  20  feet  6  inches-24  feet,  by  65  feet, 37,750 

1  lot  20  feet  5  inches  on  Exchange  Place,  24  feet  on  Merchant  street, 

and  60  feet  deep, 44,250 

1  lot  corner  of  Exchange  street  and  Pearl  street,   19  feet  11   inches 

.    front,  by  65  feet, 32,500 

1  lot  on  Pearl  street,  20  feet  by  67  feet, 29,500 

1  lot  rear  on  Exchange  Place,  28  feet  by  64  feet  -        -        .        33,000 

1  lot  corner  Exchange  Place  and  Merchant  street,   28  feet  7  inches 

front,  38  feet  7  inches  rear,  by  64  feet,         -        .         -        -  35,500 

$771,100 

THE  SHORT  CROPS  OF  1835  AND  1836. 

Excessive  drouth  followed  by  excessive  rains,  a  backward  spring  and 
early  frosts,  did  such  damage  to  the  crops,  that  the  country  did  not  produce 
food  enough  for  its  subsistence  during  the  winters.  As  early  as  the  month  of 
October  1835,  wheat  began  to  be  imported  from  foreign  countries,  and  con- 
tinued to  be  imported  until  late  in  the  spring  of  1837.  Ink)  the  single  port 
of  New  York,  there  were  imported  in  October  1835,  18,200  bushels  of  wheat, 


8,600  bushels 

17,200 

a 

68,400 

a 

109,800 

(( 

120,100 

u 

THE  SPECIE  CIRCULAR  OF  1836.  11 

In  February      1836,     36,160  bushels.  In  August        1836 

"  March  "         42,800       "         "  September        '' 

*'  April  "         39,200       "         "  October  " 

"  May  *'         31,100       "         "  Novjember        " 

"  June  "        16,600       "         "  December        " 

*'  July  "  8,000       " 

Total  import  for  1836,  493,100 

In   January  1837  132,600  bushels.In   March       1837         413,300  bushels. 

"  February  "  179,800       "       To  April  19,     "  135,300       " 

Total  import  to  April  19th,  1837,  1,369,300 

During  this  period  the  price  of  flour  ranged  from  eight  dollars  per  barrel 
to  sixteen,  which  led  in  the  winter  of  1837  to  the  flour  riots  in  the  city  of 
New  York,  which  will  be  described  on  a  subsequent  page. 

THE  SPECIE  CIRCULAR  OF  JULY  1836. 
This  was  simply  an  order  from  the  treasury  that  public  lands  must  be  paid 
for,  henceforward,  in  specie.  Speculation  in  land  had  become  a  mania,  sim- 
ilar to  that  which  has  prevailed  during  the  last  ten  years  in  stock  gambling. 
That  is  -to  say,  milHons  of  acres  were  sold  at  prices  utterly  fictitious,  and  paid 
for  in  values  utterly  fictitious.  There  was  no  longer  any  reality  in  the  busi- 
ness. The  effect  of  the  specie  circular  was  to  restore  it  to  reality,  to  prick 
the  bubble,  and,  for  a  time  to  paralyze  the  busine3s  of  the  coimtry.  The 
specie  circular  was  in  no  proper  sense  the  cause  of  the  great  crash  of  1837, 
but  it  certainly  hastened  the  catastrophe.  Its  particular  effects  upon  the 
finances  of  the  nation,  were  ably  shown  at  the  time  by  Nicholas  Biddle,  in  a 
passage  which  will  be  quoted  in  another  place.  Biddle,  like  most  of  the  finan- 
ciers threw  all  the  blame  upon  the  pin  which  pricked  the  bubble,  instead 
of  the  gas  which  inflated  it.  The  financiers  of  1857  are  doing  the  same  thing, 
and  so  will  financiers  continue  to  do,  as  long  as  we  are  subject  to  revulsions. 

THE  BEGINNING  OF  THE  PRESSURE. 

The  crash  of  1837  was  fourteen  months  incoming  on!  As  early  as  March 
1836,  money  began  to  tighten  at  most  of  the  the  leading  markets  of  the 
country,  yet  the  country  seemed  on  the  topmost  pinnacle  of  prosperity.  We 
read  in  the  papers  of  bank  stock  selling  at  80  per  cent,  premium ;  of  railroads 
begun  in  every  direction ;  of  universal  employment  for  the  people  ;  of  univer- 
sal high  prices  for  produce  ;  of  advancing  wages ;  of  new  manufactories  ;  of 
new  inventions ;  of  an  overflowing  spring  emigration ;  of  the  marvellous 
growth  of  western  cities ;  of  the  great  prosperity  of  the  planting  interests ; 
and  of  immense  importations.  In  the  midst  of  all  this  show  of  success  and 
advancement,  the  pressure  in  the  money  market  begins.  It  excited  little  re- 
mark at  the  time,  and  no  one  dreamt  of  its  continuance.  Some  papers  attrib- 
uted it  to  the  delay  of  Congress  in  voting  the  annual  appropriations,  and  call- 


18  THE  PRESSURE  OF  183Y. 

ed  upon  members  to  attend  to  their  duties,  and  relieve  the  money  market 
by  putting  the  public  money  into  circulation.  There  was  scarcely  a  whisper 
that  the  pressure  was  any  thing  but  temporary  and  accidental. 


CHAPTER  lY. 

THE    PROGRESS    OF   THE   PRESSURE. 

By  very  slow  degrees  the  pressure  increased.  The  best  way  of  exhibiting 
its  gradual  progress,  and  the  little  alarm  it  at  first  excited,  wiU  be  to  copy  a 
few  paragraphs  from  the  Press  of  the  years  1836  and  1837. 

From  BicknelVs  (Phila.)  Reporter  of  March  20th^  1836. 

"  Money. — Money  continues  scarce — very  scarce.  On  Saturday  last,  good 
paper  was  offered  at  one  per  cent,  per  month.  The  market  was  somewhat 
easier  yesterday ;  very  Httle,  however.  A  change  for  the  better  must  soon 
take  place.  The  New  Yorkers  and  Bostonians  who  have  been  forwarding  their 
stocks  to  our  market  for  the  last  fortnight,  and  have  thus  been  absorbing  our 
capital,  will  not  be  permitted  to  do  so  any  longer  with  impunity.  Our  capital- 
ists have  commenced  retahating  on  them,  and  the  New  York  market  will  soon 
be,  if  it  is  not  already,  in  as  bad  a  condition  as  ours.  Some  think  that  this  will 
not  relieve  us — it  cannot  do  otherwise,  however."     (No  hint  of  the  true  cause.) 

From  the  Baltimore  Gazette^  April  lOth^  1836. 
"The  great  and  apparently  unaccountable  delay  of  Congress  in  making  the 
necessary  appropriations  for  the  payment  of  the  current  expenses  of  govern- 
ment, and  more  especially  to  pay  the  bills  drawn  by  the  distant  agents  and 
officers  of  the  government,  some  of  which,  it  is  reported,  have  been  protested 
— has  caused  very  general,  and,  we  fear,  too  just  complaint.  Some  explanation 
is  certainly  due  from  the  representatives  to  their  constituencies  for  this  omis- 
sion to  pay  just  claims,  when  the  treasury  is  full  to  overflowing,  and  money  so 
scarce  as  to  cause  general  embarrassment  to  almost  every  class  of  business 
men."     (Equally  in  the  dark.) 

From  Niles'  Register^  April  16^A,  1836. 
"Money  seems  to  be  very  scarce,  though ^aper  ought  to  be  plentiful,  seeing 
that  in  the  last  six  months  there  have  been  incorporated  in  the  United  States 
considerably  more  ih^Ln fifty  millions  of  banking  capital,  and  we  have  nearly 
fifty-five  millions  of  surplus  in  the  deposite  banks.  *  *  *  The  responsibili- 
ties of  banks  in  the  United  States  are  six  or  eight  times  greater  than  their 
means,  though  all  the  specie  in  the  land  were  gathered  into  their  vaults — and 
there  must  be  a  scrabble  for  it !  *  *  *  The  unbounded  extent  of  credit 
which  we  have  latterly  had  has  arisen  from  the  fact  that  there  was  no  demand 
for  specie.  It  remained  in  the  banks,  only  as  ballast  stones  in  the  hold  of  a 
ship.  But  let  the  exchange  on  England  a^-ance  one  or  two  per  cent,  and 
eleven-twelfths  of  all  our  banks  will  be  deprived  of  their  means  of  accommoda- 
tion— being  also  hard  put  to  it  to  save  themselves.  A  general  war  in  Europe 
will  bring  jibout  this  state  of  things."  (The  Specie  Circular  did  it  instead.  Mr. 
Niles  understood  the  matter.) 

From  Niks'  Register  of  April  23c?,  1836. 
*'It  is  stated  from  New  York  that  bills  on  England,  owing  to  the  scarcity  of 


THE  PRESSURE  OF  1837.  19 

money,  are  at  five  per  cent,  advance,  that  is,  three  and  a  half  per  cent,  below 
the  real  par.  *  *  *  We  have  heard  that  the  United  States  Bank  has  been 
required  to  reduce  its  circulation  between  five  and  six  millions  within  a  few 
months — and,  from  the  doings  in  Congress,  it  seems  resolved  that  it  shall  sud- 
denly do  more.     The  bank  can — ^but  are  the  geople  able  to  bear  it  ?" 

Frcym  the  Boston  Daily  Advertiser^  April  20th,  1836. 

"  There  has  evidently  been  a  great  falling  off  in  the  amount  of  business 
transactions  for  three  or  four  weeks  past,  solely  on  account  of  the  scarcity  of 
money  and  the  difficulty  with  which  negotiations  are  effected.  The  lowest 
street  rates  for  the  best  notes  has  been,  during  the  present  week,  one  per  cent, 
per  month,  and  no  doubt  much  has  been  done  at  a  higher  rate.  So  long  as 
this  pressure  upon  the  very  vitals  of  trade  continues,  a  comparatively  meagre 
detail  of  weekly  operations  in  merchandize  generally  must  be  expected. 

From  Mies'  Register,  May  lUh,  1836. 

*'  There  is  an  awful  pressure  for  money  in  most  of  the  cities.  The  shavers 
exact  their  pounds  of  flesh."  (Yet,  at  the  same  date,  U.  S.  bank  stock  was 
quoted  at  125^.     The  drouth  was  killing  the  early  crops  and  injuring  grain.) 

The  congressional  appropriations  relieve  the  pressure  in  the  money  market 
for  a  few  weeks  (during  which  the  scorched  crops  were  soaked  with  continual 
rains,)  when  the  business  world  were  astounded  by  the  failure  and  arrest  of 
Benjamin  Rathbun,  of  Buffalo,  N.  Y. 

From  Mies*  Register,  August  \Zth,  1836. 

''  Great  excitement  has  been  created  in  Buffalo  by  the  failure  of  Benj.  Rath- 
bun,  one  of  the  greatest  speculators  and  business  men  in  that  region  of  enter- 
prise. Rathbun  was  an  extensive  property  holder,  owned  a  number -bf  stores, 
employed  1200  workmen  and  300  teams,  and  was  engaged  in^the  erection  of 
a  large  number  of  buildings  and  a  splendid  exchange  at  Buffalo,  And  a  large 
hotel  at  Niagara  Falls.  His  liabihties  are  estimated  at  nearly  $6,000,000,  and 
his  property  at  $2,600,000.  But  the  most  extraordinary  fact  developed  is, 
that,  of  the  vast  amount  due  by  him,  upwards  of  $1,500,000  is  of  paper  with 
forged  endorsements,  which  has  been  shaved  at  ruinous  rates.  *  *  *  it 
is  rumored  that  several  banks  will  suffer  severely  by  this  extraordinary  event, 
and  it  is  certain  that  it  will  fall  heavily  upon  individuals.  But  the  recuperative 
energies  of  Buffalo  will  soon  overcome  the  shock  she  has  received,  and  the 
'speculations'  of  Rathbun  be  only  remembered  as  a  caution  for  the  future." 

Money  was  tight  during  the  autumn,  and  even  tighter  as  winter  drew  on ; 
the  more  timid  began  to  be  alarmed,  and  *a  considerable  number  of  men  were 
thrown  out  of  employment  in  consequence  of  the  stopping  of  manufactories. 
But  the  country  at  large  was  still  hopeful,  and  the  failures  were  few. 

From  the  Providence  Courier  of  December  1st,  1836. 

"  The  following  transaction,  which  took  place  in  Boston  during  the  present 
week,  will  give  some  idea  of  the  straits  to  which  even  the  rich  are  reduced. 
A  rich  man  had  borrowed  ten  thousand  dollars  of  an  institution,  which  circum- 
stances required  he  should  pay  on  a  certain  day.  He  gave  his  notes  to  one  of 
our  banks  for  six  months  on  interest,  and  obtained  notes  of  the  bank.  He 
then  paid  a  broker  one  per  cent,  to  get  the  money  for  him,  giving  these  notes 
as  security.  The  broker  obtained  the  money  at  two  and  a  half  per  cent,  a 
month  for  six  months.  Thus  eighteen  hundred  dollars  were  paid  for  the  ten 
thousand  for  tho  six  months.     How  many  can  afford  such  sacrifices  long?" 


20  THE  FLOUR  RIOTS. 

From  tJie  iV.  Y.  Journal  of  Commerce^  December  Ith^  1836. 
"  Notwithstanding  the  continuance  of  the  pressure,  Saturday  passed  off  with- 
out any  commercial  disaster.  The  payments  of  merchants  on  that  day  are  said 
to  have  been  eight  milHons  of  dollars,  and  not  a  note  lay  over.  The  opinion 
is  gaining  ground  that  the  crisis  is  past,  and  that  the  money  market  will  short- 
ly be  easier.  We  hope  so.  On  Friday,  in  Philadelphia,  the  United  States 
Bank  discounted  $900,000,  and  the  Girard  Bank  $300,000.  Things  are  becom- 
ing easier  there." 

From  the  Journal  oj  Commerce^  January  \st^  183Y. 
"  On  Saturday  several  of  the  banks  refused  to  receive  merchants'  checks  in 
deposit.  Immense  sums  which  are  usually  liquidated  by  entries  on  the  books 
of  the  bank  had  to  be  drawn  out  in  bills.  The  consequence  was  that  some  of 
the  banks  were  exhausted  of  bills,  although  a  special  effort  was  made  to  keep 
up  a  supply  by  signing  them  as  fast  as  possible.  After  all,  in  a  good  many 
cases,  the  teller  was  oblige^  to  give  due  bills  for  the  occasion,  which  were  of 
necessity  passed  for  money  and  deposited  at  other  banks.  The  incident  is  of 
no  consequence,  except  as  illustrating  the  importance  of  that  department  of 
the  currency  called  checks.  They  save  the  use  of  a  vast  amount  of  bank  notes, 
and  lessen  immensely  the  dangers  of  bank  transactions.  The  refusal  to  take 
checks  on  deposite  as  usual  put  the  last  strain  upon  the  mercantile  strength  of 
the  city,  as  it  prevented  all  fiction  in  payments,  and  compelled  every  man  to 
furnish  real  cash.  We  are  happy  to  state  that  so  far  as  we  know,  every  man 
furnished  the  cash,  and  every  engagement  was  fulfilled.  The  merchants  have 
now  been  proved  in  all  sorts  of  ways,  and  by  quadruple  power,  and  stood  the 
test.  We  hope  they  may  soon  be  relieved  from  further  testing  of  their 
strength." 

THE  NEW  YORK  FLOUR  RIOTS  OF  1837. 
In  February,  1831,  flour  reached  what  was  then  considered  the  enormous 
price  of  twelve  dollars  a  barrel,  and  large  numbers  of  those  whom  the  pressure 
of  the  times  had  deprived  of  work,  were  distressed  in  the  extreme,  and  were 
in  want  of  the  necessaries  of  life.  The  rumor  was  started  that  the  high  price 
of  flour  was  caused  by  a  combination  of  dealers  to  hold  back  an  adequate  sup- 
ply from  market,  and  a  meeting  was  called  by  some  arrant  demagogues  to  de- 
nounce the  alleged  combination.  What  followed  was  thus  related  by  the 
Commercial  Advertiser  oi  Febm&Tj  14th,  1837  : 

At  four  o'clock  a  concourse  of  several  thousands  had  convened  in  front  of 
the  city  hall,  composed,  as  we  are  assured,  of  the  very  canaille  of  the  city, 
and  combining  within  itself  all  the  elements  of  outrage,  riot  and  revolution. 
Moses  Jaques  was  elected  as  the  fitting  chairman  of  such  a  meeting.  But 
order  was  not  the  presiding  genius  on  the  occasion,  and  the  meeting  was  di- 
vided into  various  groups,  each  of  which  was  harangued  by  some  chosen  dem- 
agogue, after  his  own  fashion  and  on  his  own  account. 

Conspicuous  among  the  orators  was  Alexander  Ming,  Jr.,  a  patriot  who  has 
several  times  been  honored  as  one  of  the  candidates  for  the  office  of  register 
in  this  city.  Ilis  discourse  on  the  present  occasion,  is  represented  as  having 
been  less  exciting  and  inflammatory  than  were  those  of  his  fellow  orators,  as 
he  confined  himself  to  the  currency  question — enforcing  the  doctrines  of  his 
colleague  of  reforms  Colonel  Benton,  and  advising  people  to  discard  bank 
notes,  and  receive  nothing  but  the  precious  metals.  At  the  close  of  his 
harangue,  iMing  introduced  a  set  of  resolutions,  of  the  character  of  which,  we 
are  no  further  informed  than  that  one  of  them  proposed  a  memorial  to  the 


TEE  FLOUR  RIOTS.  21 

legislature,  praying  a  prohibition  of  all  bank  notes  under  one  hundred  dollars. 
The  illustrious  Bentonian  patriot  was  then  uplifted  upon  the  shoulders  of  the 
sovereign  mob,  and  borne  proudly  aloft  over  to  Tammany  Hall. 

There  were  other  speakers,  however,  who  came  directly  to  the  business  of 
the  meeting,  and  in  the  most  exciting  manner/'4enounced  the  landlords  and 
the  holders  of  flour,  for  the  prices  of  rents  and  provision  s.  One  of  these 
orators,  in  the  course  of  his  address,  after  working  upon  the  passions  of  his 
audience,  until  they  were  fitted  for  the  work  of  spoil  and  outrage,  is  reported 
to  have  expressly  directed  the  popular  vengeance  against  Mr.  Eli  Hart,  who 
is  one  of  our  most  extensive  flour  dealers  on  commission.  "  Fellow  citizens  !" 
he  exclaimed,  "  Mr.  Ilart  has  now  53,000  barrels  of  flour  in  his  store  ;  let  us 
go  and  offer  him  eight  dollars  a  barrel  for  his  flour,  and  if  he  does  not  take 
it"_liere  some  person  touched  the  orator  on  the  shoulder,  and  he  suddenly 
lowered  his  voice  and  finished  his  sentence  by  saying,  "  we  shall  depart  from 
him  in  peace."  The  hint  was  sufficient— and  a  large  body  of  the  meetmg 
moved  off  in  the  direction  of  Mr.  Hart's  store  in  Washington  between  Dey  and 
Courtlandt  streets.  The  store  is  a  very  large  brick  building,  having  three 
wide  but  strong  iron  doors  upon  the  street.  Being  apprised  of  the  approach 
of  the  mob,  the  clerks  secured  the  doors  and  windows,  but  not  until  the 
middle  door  had  been  forced  and  some  twenty  or  thirty  barrels  of  flour  or 
more,  rolled  into  the  street,  and  the  heads  stove  in.  At  this  point  of  time 
Mr.  Hart  himself  arrived  on  the  ground  with  a  posse  of  officers  from  the 
police.  The  officers  were  assailed  by  a  portion  of  the  mob  in  Dey  street,  their 
staves  wrested  from  them  and  shivered  to  pieces.  The  number  of  the  mob 
not  being  large  at  this  time,  the  officers  succeeded  in  entering  the  store,  and 
for  a  short  time  interrupted  the  work  of  destruction. 

The  mayor  next  arrived  at  the  scene  of  waste  and  riot,  and  attempted  to 
remonstraf^  with  the  infatuated  multitude  on  the  folly  of  their  conduct— but 
to  no  purpose  ;  their  numbers  were  rapidly  increasing,  and  his  honor  was  as- 
sailed with  missiles  of  all  sorts  at  hand,  and  with  such  fury  that  he  was  com- 
pelled to  retire.  Large  reinforcements  of  the  rioters  having  arrived,  the  offi- 
cers were  driven  from  the  field,  and  the  store  carried  by  assault— the  first  iron 
door  torn  from  its  hinges,  being  used  as  a  battering  ram  against  the  others. 
The  destructives  at  once  rushed  in,  and  the  windows  and  doors  of  the  lofts 
were  broken  open — and  now  again  commenced  the  work  of  destruction. 

"  Barrels  of  flour  by  dozens,  fifties  and  hundreds  were  tumbled  into  the 
street  from  the  doors,  and  thrown  in  rapid  succession  from  the  windows,  and 
the  heads  of  those  which  did  not  break  in  faUing  were  instantly  staved  in. 
Intermingled  with  the  flour,  were  sacks  of  wheat  by  the  hundred,  which  were 
cast  into  the  street  and  their  contents  thrown  upon  the  pavement.  About 
one  thousand  bushels  of  wheat,  and  four  or  five  hundred  barrels  of  flour,  were 
thus  wantonly  and  foohshly,  as  well  as  wickedly  destroyed.  The  most  active 
of  the  destructionists  were  foreigners — indeed  the  greater  part  of  the  assem- 
blage were  of  exotic  origin,  but  there  were  probably  five  hundred  or  a  thou- 
sand others  standing  by  and  abetting  their  incendiary  labors.  Amidst  the 
faUing  and  bursting  of  the  barrels  and  sacks  of  wheat,  numbers  of  women 
were  engaged,  like  the  crones  who  strip  the  dead  in  a  battle,  filling  the  boxes 
and  baskets  with  which  they  were  provided,  and  their  aprons  with  flour,  and 
making  off  with  it.  One  of  the  destructives— a  boy  named  James  Roach- 
was  seen  upon  one  of  the  upper  window  sills,  throwing  barrel  after  barrel 
into  the  street,  and  crving  out  with  every  throw,  '  here  goes  flour  at  eight 
dollai^  a  barrel !'  Early  in  the  assault  Mr.  Hart's  counting  room  was  entered, 
his  books  and  papers  siezed  and  scattered  to  the  wind.  And  herein  probably 
consists  his  greatest  loss. 

"Night  had  now  closed  upon  the  scene  ;  but  the  work  qf  destruction  did  not 
cease  until  strong  bodies  of  the  police  arrived,  followed  soon  afterward  by 


/ 


22  THE  GREAT  CRASH  OF  ISSY. 

detachments  of  troops.  The  store  was  then  cleared  by  justices  Lownds  and 
Bloodgood,  and  several  of  the  rioters  were  arrested  and  despatched  to  Bride- 
well under  charge  of  Bowyer  of  the  poUce.  On  his  way  to  the  prison,  he 
and  his  assistants  were  assailed,  his  coat  torn  from  his  back,  and  several  of 
the  prisoners  were  rescued.  Several  more,  however,  were  afterwards  cap- 
tured and  secured. 

"  Before  the  close  of  the  proceedings  at  Hart's  store,  however,  the  cry  of 
*  Meech,'  was  raised — whereupon  a  detachment  of  the  rioters  crossed  over 
to  Coenties  slip,  for  the  purpose  of  attacking  the  establishment  of  Meech  &  Co., 
but  the  store  of  S.  H.  Herrick  &  Co,  coming  first  in  their  way,  they  com- 
menced an  attack  upon  that.  The  windows  were  first  smashed  in  with  a 
shower  of  brickbats,  and  the  doors  immediately  afterward  broken.  Some 
twenty  or  thirty  barrels  of  flour  were  then  rolled  into  the  street,  and  the  heads 
of  ten  or  a  dozen  knocked  in. 

"  The  number  of  rioters  engaged  in  this  work  was  comparatively  small,  and 
they  soon  desisted  from  their  labors,  probably  from  an  intimation  that  a 
strong  body  of  the  poHce  were  on  their  way  thither.  Another  account  is, 
that  they  were  induced  to  desist  from  the  work  of  mischief,  by  an  assurance 
from  the  owner,  that  if  they  would  spare  the  flour,  he  would  give  it  all  to  the 
poor  to-day.  Be  this,  however,  as  it  may,  the  ofiicers  were  promptly  on  the 
spot,  and  by  the  aid  of  the  citizens  who  collected  rapidly,  the  wretched  rabble 
was  dispersed — some  thirty  or  forty  of  them  having  been  taken  and  secured 
at  the  two  points  of  action.  Unfortunately,  however,  the  ringleaders  escaped, 
almost,  if  not  quite,  to  a  man." 


CHAPTER  V. 


THE  GREAT  CRASH  AT  LAST. 

The  South  and  Southwest  were  the  first  to  give  way.  The  Cotton  interest 
was  prostrate.  The  inflation  of  the  last  three  years  had  stimulated  the  pro- 
duction of  cotton  to  an  enormous  extent,  and  the  inflation  in  England,  by 
stimulating  manufactures,  had  kept  up  the  price  of  the  great  staple.  In  the 
spring  of  1837,  came  the  re-action.  Manufactures  languished.  The  immense 
crop  of  183G  could  not  be  sold.  Bankers  and  brokers  who  had  made  large 
advances  upon  that  crop — advances  proportioned  to  the  recent  high  price  of 
the  article — were  the  first  victims ;  and  in  their  fall  they  bore  down  with  them 
the  entire  edifice  of  American  credit.  About  the  15th  of  March,  1837,  the 
news  reached  New  York,  that  the  great  house  of  Herman,  Briggs  &  Co.,  of 
New  Orleans,  cotton  factors,  had  failed  for  eight  millions  of  dollars.  Before 
showing  the  effect  of  this  news  upon  New  York,  we  may  mention,  that  within 
a  month  after  the  failure  of  Herman,  Briggs  &  Co.,  the  whole  South-west,  as 
though  by  a  simultaneous  and  irresistible  impulse,  became  bankrupt.  In 
Mobile,  nine-tentlis  of  all  the  mercantile  firms  failed.  In  New  Orleans,  every 
house  of  importance  went  down  ;  one  concern  owing  fifteen  millions  of  dol- 
lars !     The  business  of  shipping  cotton  and  sugar  was  so  completely  paralysed' 


THE  CRASH  IN  NEW-YORK.  23 

that  days  passed  without  a  single  transaction  of  any  kind  occurring.  In  a 
word,  the  great  region  of  country  depending  for  its  resources  upon  the  raising 
of  cotton  and  sugar,  was,  in  the  space  of  less  than  four  weeks,  incapacitated 
from  paying  the  vast  suras  which  it  owed  the  ijorthern  cities,  or  any  consider- 
able part  of  the  same.  In  a  business  sense,  for  the  time  being,  the  South  was 
prostrate  and  helpless !  Cotton  fell,  in  a  few  days,  from  seventeen  cents  to 
ten  cents ;  sugar  in  about  the  same  proportion,  and  tobacco  was  unsaleable  at 
any  price. 

THE  CRASH  IN  NEW  YORK. 

The  immediate  effect  of  the  news  in  New  York  of  the  great  failure  at 
New  Orleans  was  to  cause  the  "  suspension "  of  the  then  celebrated  and  im- 
portant house  of  J.  L.  &  S.  Joseph  &  Co.,  who  were  under  acceptances  from 
New  Orleans  to  the  amount  of  several  millions  of  dollars.  It  was  given  out 
(as  it  always  is)  that  the  suspension  would  be  but  temporary,  and  that  all 
debts  would  be  paid  with  interest.  It  was  even  said  that  the  house  would  re> 
sume  on  the  following  Monday.  The  suspension,  however,  turned  out  to  be  a 
most  complete  and  disastrous  failure.  The  house  had  been  eaten  hollow  by 
discounters  and  shavers,  and  in  a  few  days  after  the  suspension,  the  furniture 
of  the  leading  partner  was  sold  at  public  auction  for  the  benefit  of  the  credi- 
tors. The  failure  of  this  house  fell  upon  the  town  and  country  like  a  thunder- 
bolt, and  from  that  day  the  grand  crash  began.  No  one  yet,  however,  began 
to  foresee  the  full  extent  of  the  danger,  and  the  commercial  papers  still  flatter- 
ed their  readers  from  day  to  day  that  the  crisis  had  passed^  and  that  in  a  few 
days  all  would  be  well  again. 

Note  the  following  extracts  from  the  Journal  of  Commerce  of  March  27, 
188Y  (a  few  days  after  the  failure  of  the  Joseph's),  and  from  BicknelVs  Reproter 
of  March  28th:— 

Fronn  the  Journal  of  Commerce^  March  27,  1887. 

"  \%  cannot  be  denied  that  people  were  tremrendously  scared  last  week,  and 
it  cannot  be  denied  that  after  all,  they  were  not  much  hurt.  Only  two  or 
three  houses  could  not  make  notes  or  draw  bills  good  enough  to  appease  pub- 
lic anxiety — ^yet  almost  every  note  which  fell  due  proved  good.  *  *  * 
Unless  the  screws  can  be  turned  down  harder,  we  may  as  well  give  over  look- 
ing for  the  grand  crash  which  has  been  so  long  waited  for,  and  which  it  was 
thought  must  certainly  have  come  last  week.  The  reason  why  the  merchants 
do  not  fail  is,  first,  they  do  not  choose  to,  and,  second,  they  are  not  obliged 
to.  They  are  rich,  that  is  the  secret  of  the  wonder,  and  we  cannot  be  mis- 
taken in  believing  that  this  fact  having  been  so  abundantly  proved,  confidence 
will  be  resumed." 

From  BicknelVs  {Phila.)  Reporter  of  March  28,  1837. 
"  The  credit  of  Philadelphia  will  not  suffer  in  the  slightest  degree  by  the 
recent  disasters  There  is  no  city  in  the  Union  that  contains  a  larger  body 
of  sounder  or  more  upright  commercial  men,  or  a  greater  amount  of  intrinsic 
wealth.  Our  banks  are  all  perfectly  safe^  pursuing  the  even  tenor  of  their 
way  within  their  means ;  and  the  little  storm  that  we  have  alluded  to  will 
only  serve  to  render  the  enterprising  a  little  more  cautious,  and,  in  the  end, 
to  purify  the  atmosphere  of  the  money  market." 


24  THE  CRASH  IN  NEW-YORK. 

Just  so^  the  commercial  papers  of  1857  have  been  talking  all  through  the 
present  revulsion.  Just  so,  class  papers  will  always  flatter  and  delude  the 
class  which  supports  them.  In  ISS^Z,  as  in  1857,  the  New  York  Herald  was 
the  first  of  the  New  York  papers  to  get  an  inkhng  of  the  real  nature  of  the 
crisis.  It  told  them. as  it  tells  now,  the  disagreeable  truth  about  the  matter, 
instead  of  the  pleasant  lie. 

The  merchants  of  New  York,  when  the  panic  of  1837  was  getting  frantic, 
sent  a  deputation  to  Nicholas  Biddle,  President  of  the  United  States  Bank, 
(then  a  state  institution  of  Pennsylvania,  but  retaining,  in  common  parlance, 
its  ancient  name,)  asking  the  help  of  his  renowned  financial  genius  to  get  them 
out  of  their  difficulties.  Mr.  Biddle,  who  was  still  as  completely  in  the  dark 
respecting  the  nature  and  extent  of  those  difficulties  as  the  humblest  scribe 
in  his  bank,  replied,  in  effect,  that,  owing  to  certain  accidental  and  temporary 
causes,  private  credit,  for  the  moment,  was  impaired,  and,  in  consequence,  the 
whole  system  of  foreign  and  domestic  exchanges  was  deranged.  "  For  this," 
continued  the  financier,  "  the  appropriate  remedy  seems  to  be,  to  substitute, 
for  the  private  credit  of  individuals,  the  moi'e  known  and  established  credit  of 
the  bank,  until  pubhc  confidence  in  private  stability  has  time  to  revive.  To 
the  foreign  exchanges  I  would  apply  that  restorative  by  issuing  the  engage- 
ments of  the  bank,  payable  in  London,  Paris  and  Amsterdam,  to  be  remitted 
in  lieu  of  private  bills.  These  will  be  ready  for  the  next  packet,  and  they 
will  enable  the  country  to  make  without  injury  an  early  provision  for  the  ad- 
justment of  foreign  exchanges  by  the  natural  operation  of  remitting  its  pro- 
duce and  its  coin.  A  similar  operation  I  shall  recommend  to  the  board  in 
respect  to  the  domestic  exchanges,  by  an  enlarged  and  immediate  purchase 
of  bills  of  exchange  on  the  distant  sections  of  the  Union." 

These  smooth  and  plausible  words,  aided  by  the  operations  proposed,  gave  ', 
relief  to  the  money  market  for  the  space  of  four  days  ! 

To  show  still  further  how  utterly  ignorant  financial  and  commercial  writers 
sometimes  are  of  the  real  nature  of  finance  and  business,  we  copy  another 
short  passage  from  the  Journal  of  Commerce  of  the  fourth  day  after  Mr. 
Magician  Biddle  had  waved  his  healing  wand  over  a  paralyzed  metropolis. 

From  the  Journal  of  Commerce,  April  Zd,  1837. 

*'  The  past  week  will  long  be  remembered  by  our  merchants  as.  a  season  of 
trial  and  difficulty,  such  as  has  not  before  been  experienced  for  many  years. 
It  will  be  remembered  also,  we  trust,  as  the  cribis  of  the  great  financial 
troubles  which  have  been  gathering  for  more  than  a  year  past  from  the  com- 
bined influence  of  speculation,  the  surplus  revenue,  bad  government,  etc.  The 
first  three  days  of  the  week  were  indeed  gloomy  ;  a  number  of  failures  occur- 
red, chiefly,  however,  of  houses  essentially  sound,  but  which  were  unable  to 
sustain  themselves  under  the  tremendous  money  pressure  which  existed,  and 
what  was  worse  than  all,  in  some  of  its  bearings,  Confidence,  that  essential 
element  of  credit,  appeared  to  be  entirely  at  an  end.  It  was  a  glorious  time 
for  panic-makers,  croakers,  and  assassins  of  credit,  and  well  did  they  improve 
the  opportunity  afforded  them.  We  could  mention  a  dozen  of  our  largest 
and  best  houses,  who  were  reported  among  the  fallen,  but  who  still  survive 


THE  CRASH  IN  NEW-YORK.  ^       ^1  25 

unharmed.  The  temporary  suspension  of  payments  by  Messrs.  E.  M.  Morgan 
&  Co.,  who  were  agents  for  20  or  80  country  banks,  gave  opportunity  to  the 
enemies  of  such  institutions  to  propagate  suspicions  concerning  them ;  and 
all  of  these  troubles  were  aggravated,  we  will  ^t  say  wantonly  aggravated, 
by  a  portion  of  the  press. 

"  Tihus  things  were  proceeding,  when,  by  a  concerted  movement,  between 
the  U.  S.  Bank  and  our  local  institutions,  measures  were  adopted  for  the  re- 
lief of  the  community  ;  and  from  that  moment  the  state  of  the  money  market 
has  been  evidently  improving.  During  the  last  three  days,  there  has  not 
been  a  single  failure.  Stocks  which  had  been  rapidly  declining  began  to  ral- 
ly, and  confidence,  though  still  scarce,  was  perceptibly  gaining  ground.  We 
feel  assured  that  these  encouraging  indications  will  continue  and  increase 
until  the  money  market  shall  recover*  its  Uisual  healthy  condition."  (And  so 
on,  in  the  same  strain,  for  half  a  column.) 

r  Yet,  in^two  days^  the  market  was  down  again  to  a  lower  point  than  ever, 
and  a  deeper  glgom  overspread  the  city  than  was  ever  known  before.  Read 
the  following : — 

Fromthe  NewYorh  Transcript^  April  6,  1837. 

"  Yesterday  was  a  day  that  tried  men's  souls ;  the  money  market  was  tighter 
than  ever.  For  the  first  day  or  two  it  has  been  more  so  than  at  any  time  dur- 
ing the  pressure,  and  should  it  continue  to  become  more  so,  things  will  be 
brought  to  a  focus  pretty  quickly,  for  our  merchants  will  become  discouraged 
and  stop  when  they  are  solvent.  Yesterday  there  were  several  very  heavy 
failures,  principally  among  our  dry  goods  people,  which  class  of  merchants 
were  considered  the  cream  of  New  York,  and  have  stood  the  high  price  ol 
money  nobly,  and  so  long,  that  it  was  thought  they  would  weather  the  point, 
and  pass  the  gale  unharmed.  The  payments  of  the  New  Yord  dry  goods 
jobbing  houses  were  very  heavy  during  the  months  of  April  and  May,  and 
the  small  return  of  money  from  the  South,  with  the  tremendous  quantity  of  \ 
protested  paper,  had  driven  them  to  despair  and  eventually  to  fail.  It  is  es-  | 
timated  that  the  Southern  merchants  do  not  pay  Jive  cents  on  the  dollar  of  which  '\ 
they  owe  in  New  York  ;  and  some  of  our  large  Southern  houses  have,  for  the 
last  two  or  three  months,  paid  both  sides  of  their  note  book,  which  speaks 
volumes  in  their  favor."        \  • 

Through  the  whole  month  of  April,  the  failures  continued,  and  things  grew 
worse  and  worse.  Toward  the  close  of  the  month,  there  was  one  transient 
gleam  of  sunshine  afforded  by  the  arrival  of  favorable  news  from  England. 
At  that  time  the  three  great  American  houses  in  England  were  Thomas  Wil- 
son &  Sons,  Thomas  Wilder  &  Co.,  and  Timothy  Wiggins,  (the  "  Three  W's.") 
The  news  was,  that  the  Bank  of  England  had  agreed  to  assist,  those  houses 
to  sustain  the  awful  pressure  upon  them  to  the  extent  of  £500,000,  and  that 
the  financial  pressure  in  England  seemed  to  be  relieved.  For  one  day  the  city 
feebly  smiled ;  though  on  that  day,  many  thousand  laborers  petitioned  the 
Common  Council  for  work,  alleging  thatiheir  families  were  in  want  of  food.        ^ 

About  the  25th  of  April,  the  merchants  of  New  York,  in  desperation,  held 
a  meeting  at  the  Masonic  Hall,  and  resolved  to  send  a  committee  of  "  not  less 
than  fifty,"  to  Washington,  to  wait  on  the  Presiden.t,and  urge  the  immediate 
rescinding  of  the  "  specie  circular"  as  the  only  measure  of  saving  the  country 
from  "  universal  bankruptcy."  *'  The  meeting,"  said  the  JV.  Y.  American^ 
*' was  a  remarkable  one,  for  the  vast  number  assembled — the  entire  decorum  of 


26  THE  CRASH  IN  NEW-YORK. 

the  proceedings — and,  especially,  from  the  deep,  though  subdued,  and  res- 
trained excitement,  which  evidently  pervaded  the  mighty  mass.  It  was  a 
spectacle  that  could  not  be  looked  upon  without  emotion,  that  of  many  thou- 
sands of  men,  trembling  as  it  were  on  the  brink  of  ruin,  owing  to  the  mea- 
sures, as  they  verily  believe,  of  their  own  government,  which  should  be  their 
friend,  instead  of  their  oppressor — and  yet  meeting  with  deliberation  and 
calmness,  listening  to  a  narrative  of  their  wrongs,  and  the  causes  thereof  ; 
adopting  such  resolutions  as  were  deemed  judicious,  and  then  quietly  separ- 
ating to  abide  the  result  of  their  firm  but  respectful  remonstrances." 

The  deputation,  reduced  to  fifteen,  repq^ired  to  Washington,  and  sought  an 
interview  with  the  President.  The  wily  and  pohtic  Van  Buren  refused  to  con- 
fer with  them  except  in  writing);  and  accordingly  in  entering  the  "  presence," 
they  merely  read  a  statement  of  their  case,  and  the  petition  of  which  they 
were  the  bearers.  Mr.  Van  Buren,  to  his  honor,  his  immortal  honor,  stood 
firm  to  his  principles,  refused  to  rescind  the  specie  circular,  and  thus  kept  the 
federal  government,-  for  ever,  separate  from  the  financial  institutions  of  the 
people — which  was  the  great  gain  to  the  nation  of  the  revulsion  of  1837,  and 
it  was  worth  the  price  !  ! ! 

No  sooner  was  this  news  known  than  the  pressure  resolved  itself  into  mere 
mad  and  blind  panic.     Tlie  bottom  was  out. 

Here  is  a  brief  record  of  some  of  the  events  of  the  first  few  days  of  May, 
ISST. 

May  4. — John  Fleming,  President  of  the   Merchants'  Bank,  fell  dead  from 

excessive  anxiety  with  regard  to  the  affairs  of  the  bank.     A  run  set  in  on  all 

the  banks.  w^ 

May  5th. — Merchants  failed  by  whole  blocks.      "  It  is  in  vain  to  disguise," 

said  the  iV  Y.  American^  "  that  the  whole  frame  of  society  is  out  of  joint." 

/  May  6th. — The  failures  worse  and  worse.      U.  S.  Bank  Stock,  for  the  first 

'       time  in  twenty  years,  fell  below  par.     It  was  quoted  to-day  at  98  ;  not  a  stock 

in  the  market  brought  par. 
\  May  'Zth. — The  Dry  Dock  Bank,  after  a  hard  run,  stopped  payment. 

May  8th. — Steady  drain  on  the  banks.     Failures  too  numerous  to  chronicle. 
No  bank  stock  at  par,  but  a  few  shares  of  Utica  rail  road  sold  at  102. 
,  May  9th. — Furious  run  on  all  the  banks — depositors  and  bill  holders  min- 

gling in  one  indiscriminate  mass,  all  desperate  to  get  their  money.  N.  F 
American  said :  "  The  banks  are  all  safe,  as  the  run  is  ridiculous."  Tliat  very 
evening^  a  meeting  of  bank  officers  was  held,  at  which  it  was  resolved  to  sus- 
pend specie  payments  the  next  morning.  Three  banks  opposed  the  measure, 
namely,  the  Merchants',  the  Manhattah,  and  the  Bank  of  America ;  but  the 
'        next  morning,  they  felt  compelled  to  suspend. 

May  10. — The  suspension  announced.  The  city  drew  a  long  breath,  and 
felt  relieved.  At  noon,  a  n>eeting  of  merchants  was  held  at  the  Exchange  to 
sustain  the  banks.  President,  James  Poorman ;  Vice  Presidents,  Nathaniel 
Prime,  Gideon  Lee,  David  Leavitt,  P.  (Gr.  Stuyvcsant,  Girtain  C.  Verplanck, 
William  B.  Astor,  Urenddent  Phelps,  Kobort  T.onnore,  Sto|)hon  Whitney,  C. 


THE  CRASH  IN  NEW-YORK.  2*7 

H.  Russell,  Benjamin  Birdsall,  Joseph  Defew,  Andrew  Lockwood,  Philetus  H. 
Woodruff,  Samuel  Ward  ;  Secretaries,  John  H.  Stephens,  Richard  M.  Blatch- 
ford,  W.  H.  Aspinwall.  The  resolutions  were  moved  by  James  G.  King,  and 
seconded  by  Nathaniel  Prime. 

May  11th. — Chaos,  bewilderment,  despondency  and  lamentation.  Three 
hundred  firms  in  the  city  had  failed. 

The  following  table  shows  that  the  suspension  of  specie  payments  through- 
out the  country  proceeded  as  rapidly  as  the  mail  bore  the  news  of  the  sus- 
pension in  New  York : 

PROGRESS  OF  BANK  SUSPENSION  OF  ISSt. 
Planter's  and  Agricultural  Banks,  Natchez;        -         ,         -         -         -     May  4 

State  Bank  at  Montgomery,  Ala., "9 

New  York  City  Banks, '*  10 

Albany,  Hartford,  New  Haven,  Philadelphia,  Providence,  and  Balti- 
more,   "11 

Mobile  and  Boston, "12 

New  Orleans  (6  Banks),         -        -        - "13 

Washington,  D.  C, "15 

Montreal, "16 

Charleston,  Cincinnati,  and  Quebec,  -         --         -         -        -         -"lY 

State  Bank  of  North  Carolina,        -------  "18 

Savannah  and  Augusta, "19 

In  the  crash  of  183Y,  stocks  do  not  appear  to  have  suffered  the  extreme 
fluctuations  which  they  have  experienced  in  IBS'/.  Taking  the  stock  of  the 
United  States  Bank  as  a  specimen,  we  present  the  following  : 

Prices  of  the  IT.  S.  Bank  Stock  during  the  crash  of  1837. 


January 

6th, 

March 

19th, 

(( 

29th, 

May 

2d, 

4th, 

5th, 

6th, 

8th, 

9th, 

116 

May 

11th, 

103  (UticaR.  R.  113.) 

119 

(( 

12th, 

104 

118 

u 

13th, 

110 

111 

u 

15th, 

110 

108 

.( 

18th, 

109J 

102 

a 

19th, 

111 

98 

C( 

23d, 

lOH 

96 

a 

26th, 

103 

96 

a 

31st, 

101 

100 

Nov.  24th, 

121 

"  10th,  (suspension,)  100 

CONTRACTION  OF  DISCOUNTS  AND  CIRCULATION, 
The  following  statement  was  furnished  by  the  Bank  Commissioners  for  the 
purpose  of  showing  the  general  condition  of  the  banks  in  May,  as  compared 
with  their  condition  on  the  1st  of  January,  1837  ; 


28  HARD  CASH  AT  THE  CUSTOM  HOUSE. 

Eighteen  New  York  City  Banks. 

1st  January.  4th  May. 

Loans  and  Discounts,     -    -    -    -    36,442,000  35,685,000 

Specie, 3,854,000  2,596,000 

Circulation, 8,155,000  4,931,000 

Individual  Deposites,     -    -    .    -     11,180,000  9,536,000 

United  States     "           ...    -      7,176,000  3,800,000 

Sixty-Three  Country  Banks. 

1st  January.  4tli  May.         '"'} 

Loans  and  Discounts,     .    -    -    -    26,979,000  26,822,000 

Specie, 1,459,000  1,100,000 

Circulation, 12,461,000  9,601,000 

Thus,  the  City  banks  had  reduced  their  discounts  about  $800,000,  and  their 
circidation  three  millions  and  a  quarter  I 

HARD  CASH  AT  THE  CUSTOM  HOUSE. 
The  government  having  decreed  that  nothing  but  specie  should  be  received 
at  the  Custom  House,  the  merchants  were  so  extremely  inconvenienced  that 
the  Collector,  Samuel  Swartwout,  went  to  Washington  to  endeavor  to  obtain 
some  mitigation  of  the  difficulty.  On  his  return,  a  meeting  of  merchants  con- 
vened to  hear  his  report.     The  New  York  American  says : — 

"  A  meeting  of  merchants,  convened  to  hear  the  report  of  the  Collector  on 
his  return  from  "Washington,  was  held  at  one  o'clock  at  the  Exchange.  Mr. 
Swartwout,  on  presenting  himself,  was  loudly  cheered.  He  stated,  that  im- 
mediately on  receiving  the  order  requiring  specie  payments,  on  Saturday, 
convinced  of  the  impractibility  of  enforcing  it,  he  started  for  Washington  to 
represent  the  case  to  the  Government. 

"  The  Secretary  and  President  both  expressed  great  sympathy  with  the  mer- 
chants, but  the  former  exhibited  the  law,  which  forbade,  as  he  said,  any  other 
course.  No  order,  other  than  that  given,  could  be  issued — nor  could  that  be 
withdrawn.  On  a  suggestion  from  the  Collector,  that  permission  might  be 
given  to  delay  acting  on  that  order,  it  was  replied  that  such  permission  would 
virtually  be  an  infringement  of  the  law,  but  that  in  the  meantime,  the  Execu- 
tive would  seek  to  devise  any  means  which,  in  addition  to  an  early'call  of 
Congress,  might  tend  to  alleviate  the  sufferings  of  the  country.  Mr.  S.  then 
added,  that  as  no  discretion  could  be  exercised  by  the  Department  at  Wash- 
ington, nor  authorized  in  the  Collector,  he  had  determined  to  throw  himself 
on  the  merchants,  on  Congress,  and  on  his  country,  for  his  justification  in  con- 
tinuing to  take,  until  after  the  meeting  of  Congress,  current  notes  in  payment 
of  duties  and  bonds.  This  annunciation  was  received  with  deafening  cheers, 
in  the  midst  of  which,  Mr.f  Swartwout  left  the  Exchange.  The  meeting  was 
then  organized,  James  G.  King  being  called  to  the  chair,  and  J.  A.  Stevens 

appointed  Secretary  ;  when,  on  motion  of  Daniel  Jackson,  seconded  by , 

it  was  resolved,  that  the  Chairman  and  Secretary,  together  with  the  mover 
and  seconder,  be  a  committee  to  address,  in  the  name  of  the  meeting,  a  letter 
of  thanks  to  Mr.  Swartwout  for  his  manly  conduct. 

THE  TROUBLES  OF  A  TRAVELLER. 
The  currency  being  totally  deranged,  travellers  were  put  to  strange  shifts. 


THE  TROUBLES  OF  A  TRAVELLER.        '       29 

The  following  narrative  appeared  in  the  papers  a  few  days  after  the  suspen- 


"  I  left  New  York  on  Thursday  and  anticipating  some  trouble  in  passing 
Utica  money,  obtained  two  five  dollar  New  Jei^ey  bills,  from  my  obliging 
friend  and  kind  host,  Mr.  Bunker.  I  was  able  to  get  over  to  Philadelphia 
very  well,  and  received  silver  to  the  amount  of  $1  50,  in  exchange  for  one  of 
my  bills.  I  was  able  to  pay  my  bill  in  Philadelphia  with  that  and  other  silver, 
and  had  one  dollar  in  specie  remaining  when  I  went  on  board  the  steamboat 
for  New  York.  I  immediately  offered  my  New  Jersey  five  dollar  note,  which 
was  refused,  and  I  was  informed  that  no  money  would  be  received  except 
specie,  and  notes  of  the  Philadelphia  and  New  York  banks.  Whilst  this  con- 
versation was  going  on,  a  gentleman  from  Troy  offered  a  five  dollar  note  of 
the  Troy  City  Bank ;  he  was  promptly  told  that  no  Safety  Fund  notes  would  be 
received.  As  we  had^  no  Philadelphia  or  New  York  City  money,  we  were  in 
some  trouble,  as  it  was  early  in  the  morning  and  no  broker  could  be  found. 
We  made  up  our  minds  to  go  on  at  any  rate.  After  we  had  ascended  the 
Delaware  a  few  miles,  we  went  to  the  captain  and  stated  our  case  ;  he  seemed 
somewhat  provoked  that  we  had  come  on,  for  he  said  he  had  heard  the  young 
man  tell  us  that  our  money  would  not  be  received.  He  finally,  however,  con- 
sented to  take  my  New  Jersey  five  dollar  note,  if  we  could  muster  one  dollar  in 
silver,  and  give  us  two  tickets  for  our  passage.  I  stated  to  him  that  I  wanted 
breakfast,  as  did  also  the  Troy  gentleman ;  he  said  he  could  not  help  that. 
I  took  therefore  two  tickets,  amounting  to  six  dollars,  having  just  one  dollar 
in  silver,  and  we  were  compelled  to  go  without  our  breakfasts.  Fortunately, 
the  gentleman  from  Troy  had  a  shilling  and  three  cents  in  specie,  with 
which  he  purchased  some  gingerbread  and  apples,  which  we  divided  between 
us,  and  thus  we  got  back  to  New  York.  The  Troy  gentleman  could  only  pay 
me  in  a  three  dollar  Vermont  bill,  and  I  had  no  other  bills  less  than  five  dol- 
lars. On  my  passage  up  the  North  River,  I  paid  away  this  three  dollar  Ver- 
mont bill,  and  took  two  supper  tickets,  in  order  to  make  change.  Thus,  in 
the  end,  although  I  had  no  breakfast,  I  became  entitled  to  two  suppers." 

THE    JOKES    OF    THE    CEASH   OF  1831. 

From  the  iV   Y.  Sun. 
W  "  During  the  performance  of  Brutus  at  the  National  Theatre,  a  gentleman 
asked  his    comrade  what  was  the  meaning  of  the  letters  S.  P.  Q.  R.,  on  the 
banners.     *  Why,  the  meaning  is  plain  enough,  Tom,'  replied  his  friend,  *  it 
means  Specie  Payment  Quite  Rare  !'"^ 

From  the  Baltimore  Gazette. 
p"  A  market  man  at  Lowell,  Mass.,  being  like  every  one  else,  bothered  for 
change,  has  hit  upon  a  new  expedient.  With  his  marketables,  he  carries  a 
basket  from  which  he  makes  change^in  hens'  eggs.  Now,  unless  the  Legisla- 
ture, like  some  other  wise  bodies,  should  enact  a  penalty  '  for  issues  of  so 
small  a  denomination,'  we  don't  see  why  the  Lowell  man  will  not  get  along 
very  well." 

From  the  JS^.  Y.  Commercial  Advertiser. 
"  The  *  egg  currency'  is  certainly  better  and  more  convenient  than  that  of    ] 
some  countries  we  wot  of — Texas  for  instance,  where  th'ey  pay  in  cows  for     I 
large  sums,  and  throw  in  the  calves  for  the  change."  . 

HARD  TIMES  FOR  FIVE  YEARS. 
Ten  days  after  the  banks  of  New  York  had  suspended  specie  payments, 
Gov.  Marcy  signed  a  bill  legalizing  the  suspension,  and  authorizing  the  banks 


80  HARD  TIMES  FOR  FIVE  YEARS. 

of  the  state  to  issue  twenty-nine  and  a  half  millions  of  paper.  To  provide  a 
circulating  medium,  "  shinplasters  "  were  issued  in  millions.  The  crops  of 
183Y  were,  fortunately,  abundant,  but  during  the  winter  of  1838,  there  was 
extreme  suffering  among  the  poor,  owing  to  the  scarcity  of  employment.  In 
the  life  of  Horace  Greeley,  we  find  the  following  notice  of  that  dreadful 
winter. 

"The  winter  of  1838  was  unusually  severe.  The  times  were  hard,  fuel  and 
food  were  dear,  many  thousands  of  men  and  women  were  out  of  employment, 
and  there  was  general  distress.  As  the  cold  months  wore  slowly  on,  the 
sufferings  of  the  poor  became  so  aofgravated,  and  the  number  of  the  unemploy- 
ed increased  to  such  a  degree,  that  the  ordinary  means  were  inadequate  to  re- 
lieve even  those  who  were  destitute  of  every  one  of  the  necessaries  of  life. 
Some  died  of  starvation.  Some  were  frozen  to  death.  Many,  through  ex- 
posure and  privation,  contracted  fatal  diseases.  A  large  number  who  had 
never  before  known  want,  were  reduced  to  beg.^  Respectable  mechanics 
were  known  to  offer  their  services  as  waiters  in  eating  houses  for  their  food 
only.  There  never  had  been  such  a  time  of  suffering  in  New  York  before, 
and  there  has  not  been  since.  Extraordinary  measures  were  taken  by  the 
comfortable  classes  to  alleviate  the  sufferings  of  their  unfortunate  fellow  cit- 
izens. Meetings  were  held,  subscriptions  were  made,  committees  were  ap- 
pointed; and  upon  one  of  the  committees  Horace  Greeley  was  named  to 
serve,  and  did  serve,  faithfully  and  laboriously,  for  many  weeks.  The  dis- 
trict which  his  committee  had  in  charge  was  the  Sixth  Ward,  the  '  bloody ' 
Sixth,  the  squalid,  poverty  stricken  Sixth,  the  pool  into  which  all  that  is  worst 
in  this  metropolis  has  a  tendency  to  reel  and  slide.  It  was  his  task,  and  that 
of  his  colleagues,  to  see  that  no  one  froze  or  starved  in  that  forlorn  and  pol- 
luted region.  More  than  this  they  could  not  do,  for  the  subscriptions,  liberal 
as  they  were,  were  not  more  than  sufficient  to  relieve  actual  and  pressing 
distress.  In  the  better  parts  of  the  Sixth  Ward  a  large  number  of  mechanics 
lived,  whose  cry  was,  not  for  the  bread  and  the  fuel  ofcharisy,  but  for  Work! 
Charity  their  honest  souls  disdained.  Its  food  choked  them,  its  fire  chilled 
them.     Work,  give  us  work  !  was  their  eager,  passionate  demand. 

The  spring  brought  relief,  but  the  business  of  the  country  remained  stag- 
nant and  disordered  till  1842.  The  year  1841  was  perhaps  the  gloomiest  of 
all.  The  failure  of  the  United  States'  Bank,  in  consequence  of  its  ill-judged, 
but  well-meant  endeavors  to  sustain  the  cotton  interest,  brought  ruin  upon 
thousands,  and  depressed  business  to  the  lowest  point.  In  1841,  more  than 
3000  houses  in  Philadelphia  stood  vacant.  But  it  was  darkest  just  before  the 
dawn  of  better  times.  In  1842,  the  long  period  of  enforced  economy  on  the 
part  of  the  people,  aided  by  the  stimulating  tariff  of  that  year,  and  the  hopes 
infused  by  a  new  administration,  began  to  give  tone  to  the  body  pohtic. 
From  1842  to  185*7,  the  country  enjoyed  great  apparent,  and  some  real,  pros- 
perity. The  New  York  banks  resumed  specie  payment  in  May  1838,  but  it 
was  not  till  1842,  that  the  resumption  became  general  and  permanent.  Phila- 
delphia  resumed  and  suspended  three  times  before  her  final  resumption  in 
that  year. 


OPINIONS  ON  THE  CAUSE  OF  THE  REVULSION.  81 

CHAPTER  VI. 

OPINIONS  RESPECTING  THE  CAUSE  OF  THE  REVULSION. 
It  is  curious  to  notice  how  blind  many  otherwise  clear-headed  persons  were 
to  the  true  causes  of  the  difficulty  of  183Y,  or  what  contradictory  opinions 
were  expressed  on  every  hand. 

OPINION  OF    THE    WHIG    PARTr  AS  EXPRESSED    IN    THE  N.  Y.  AMERICAN. 

From  the  N.  Y.  Aynerican^  May  5,  1837. 

"  When  the  cause  of  our  calamities  is  traced  mainly  to.  misgovernment,  we 
hear  it  said,  '  Oh,  for  God's  sake,  do  not  make  this  a  political  matter.'  Not 
make  it  a  political  matter?  Why,- it  is  from  politics,  base,  vile,  mercenary, 
personal  politics,  that  the  evil  is  Avhat  it  is.  It  is  to  the  fatal  popularity  of 
Andrew  Jackson,  which  gave  currency  to  every  mearjare  that  the  corruption 
or  resentments  of  his  irresponsible  minions  and  flatterers  suggested  to  him — 
it  is  to  the  dishonorable  sycophancy  which  thought  it  'glory  enough'  to  serve 
under,  and  render  unquestioning  obedience  to  such  a  chief,  that  the  over- 
whelming ruin  which  is  desolating  this  land  is,  in  a  large  degree,  to  be 
ascribed. 

"  True,  there  has  been  overtrading — true,  there  has  beei;  expansion  of  the 
currency — true,  there  has  been  a  wild  spirit  of  speculation — but  all  these 
would  have  been  moderated,  controlled,  and  rendered  kss  disastrous,  if  the 
balance-wheel  of  our  whole  monetary  system,  the  Bank  of  the  United  States, 
had  not  been  broken,  and  if  that  scarcely  less  mischievous  measure,  the  forced 
introduction  from  Europe  to  which  we  were  and  are  in  debt,  of  its  specie 
treasures,  had  not  boen  undertaken." 

THE    OPINION    OF    PRESIDENT    VAN  BUREN. 

The  extra  session  of  Congress,  called  to  devise  measures  of  relief,  began 
on  the  fourth  of  September,  1837.  The  President's  Message  was  looked  for 
with  the  most  intense  interest.  Mr.  Van  Buren  gave  the  following  opinion  of 
the  causes  of  the  total  prostration  of  credit: — 

"  The  history  of  trade  in  the  United  States  for  the  last  three  or  four  years, 
affords  the  most  convincing  evidence  that  our  present  condition  is  chiefly  to 
be  attributed  to  overaction  in  all  the  departments  of  business ;  an  overaction 
deriving,  perhaps,  its  first  impulses  from  antecedent  causes,  but  stimulated  to 
its  destructive  consequences  by  excessive  issues  of  bank  paper,  and  by  other 
facilities  for  the  acquisition  and  enlargement  of  credit.  At  the  commence- 
ment of  the  year  1834  the  banking  capital  of  the  United  States,  including 
that  of  the  national  bank  then  existing,  amounted  to  about  two  hundred  mil- 
lions of  dollars  ;  the  bank  notes  then  in  circulation,  to  about  ninety-five  mil- 
lions ;  and  the  loans  and  discounts  of  the  banks  to  three  hundred  and  twenty- 
four  millions.  Between  that  time  and  the  first  of  January,  1838,  being  the 
latest  period  to  which  accurate  accounts  have  been  received,  our  banking 
capital  was  increased  to  more  than  two  hundred  and  fifty-one  milHons ;  our 
paper  circulation  to  more  than  one  hundred  and  forty  millions  ;  and  the  loans 
and  discounts  to  more  than  four  hundred  and  fifty-seven  miUions.  To  this 
vast  increase  are  to  be  added  the  many  millions  of  credit,  acquired  by  means 
of  foreign  loans,  contracted  by  the  States  and  State  institutions,  and  above  all 
by  the  lavish  accommodations  extended  by  foreign  dealers  to  our  merchants. 

"  The  consequences  of  this  redundancy  of  credit  and  of  the  spirit  of  reck- 
less speculation  engendered  by  it,  were,  a  foreign  debt  contracted  by  our  citi- 


82  THE  OPINION  OFcrEESIDENT|VAN  BUREN.  ; 

zens,  estimated,  in  March  last,  at  more  than  thirty  millions  of  dollars;  the 
extension  to  traders  in  the  interior  of  our  country,  of  credits  for  supplies, 
greatly  beyond  the  wants  of  the  people  ;  the  inyestment  of  thirty-nine  and  a 
half  millions  of  dollars  in  unproductirve  pubhc  lands,  in  the  years  1885  and 
1836,  -whilst,  in  the  preceding  year  the  eales  amounted  to  only  four  and  a  half 
millions  ;  the  creation  of  debts,  to  an  almost  countless  amount,  for  real  estate 
in  existing  or  anticipated  cities  and  villag«es,  equally  unproductive,  and  at 
prices  now  seen  to  have  been  greatly  disproportionate  to  their  real  value  ;  the 
expenditure  of  immense  sums  in  improvements  which,  in  many  cases,  have 
been  found  to  be  ruinously  improvident ;  the  diversion  to  other  pursuits  of 
much  of  the  labor  that  should  have  been  applied  to  agriculture,  thereby  con- 
tributing to  the  expenditure  of  large  sums  in  the  importation  of  grain  from 
Europe — an  expenditure  which,  amounting  in  1834  to  about  two  hundred  and 
fifty  thousand  dollars,  was,  in  the  first  two  quarters  of  the  present  year,  in- 
creased to  more  than  two  milHons  of  dollars ;  and  finally,  without  enumerat- 
ing other  injurious  results,  the  rapid  growth  among  all  classes,  and  especially 
in  our  great  commercial  towns,  of  luxurious  habits,  founded  too  often  on 
merely  fancied  wealth,  and  detrimental  aUke  to  the  industry,  the  resources, 
and  the  morals  of  our  people. 

"  It  was  so  impossible  that  such  a  state  of  things  could  long  continue,  that 
the  prospect  of  revulsion  was  present  to  the  minds  of  considerate  men  before 
it  actually  came.  None,  however,  had  correctly  anticipated  its  severity.  A 
concurrence  of  circumstances,  inadequate  of  themselves  to  produce  such  wide- 
spread and  calamitous  embarrassments,  tended  so  greatly  to  aggravate  them, 
that  they  cannot  be  overlooked  in  considering  their  history.  Among  these 
may  be  mentioned,  as  most  prominent,  the  great  los5  of  capital  sustained  by 
our  commercial  emporium  in  the  fire  of  December,  1885 — a  loss,  the  effects 
of  which  were  underrated  at  the  time,  because  postponed  for  a  season  by  the 
great  facilities  of  credit  then  existing  ;  the  disturbing  effects,  in  our  commer- 
cial cities,  of  the  transfers  of  the  public  moneys  required  by  the  deposite  law 
of  June,  1836  ;  and  the  measures  adopted  by  the  foreign  creditors  of  our 
merchants  to  reduce  their  debts,  and  to  withdraw  from  the  United  States  a 
large  portion  of  our  specie. 

"  However  unwilling  any  of  our  citizens  may  heretofore  have  been  to  as- 
sign to  these  causes  the  chief  instrumentality  in  producing  the  present  state 
of  things,  the  developments  subsequently  made,  and  the  actual  condition  of 
other  commercial  countries,  must,  as  it  seems  to  me,  dispel  all  remaining 
doubts  upon  the  subject.  It  has  since  appeared  that  evils,  similar  to  those 
suffered  by  ourselves,  have  been  experienced  in  Great  Britain,  on  the  conti- 
nent, andi  indeed,  throughout  the  commercial  world  ;  and  that,  in  other  coun- 
tries, as  well  as  in  our  own,  the^  have  been  uniformly  preceded  by  an  undue 
enlargement  of  the  boundaries  of  trade,  prompted,  as  with  us,  by  unprece- 
dented expansions  of  the  systems  of  credit.  A  reference  to  the  amount  of 
banking  capital,  and  the  issues  of  paper  credits  put  in  circulation  in  Great 
Britain,  by  banks,  and  in  other  ways,  during  the  years  1834,  1836,  and  1886, 
will  show  an  augmentation  of  the  paper  currency  there,  as  much  tlispropor- 
tioned  to  the  real  wants  of  trade  as  in  the  United  States.  Wilh  this  redun- 
dancy of  the  paper  currency,  there  arose  in  that  country  also  a  spirit  of  ad- 
venturous speculation,  embracing  the  whole  range  of  human  enterprise.  Aid 
was  profusely  given  to  projected  improvements ;  large  investments  were  made 
in  foreign  stocks  and  loans  ;  credits  for  goods  were  granted  with  unbounded 
liberality  to  merchants  in  foreign  countries,  and  all  the  means  of  acquiring 
and  employing  credit  were  put  in  active  operation,  and  extended  in  their  ef- 
fects to  every  department  of  business,  and  to  every  quarter  of  the  globe.  The 
reaction  was  proportioned  in  its  violence  to  the  extraordinary  character  of  the 
events  which  preceded  it.  The  commercial  community  of  Great  Britain  were 
subjected  to  the  greatest  difficulties,  and  their  debtors  in  this  country  were 


THE  OPINION  OF  NICHOLAS  BIDDLE.  83 

not  only  suddenly  deprived  of  accustomed  and  experienced  credits,  but  called 
upon  for  payments,  which  in  the  actual  posture  of  things  here,  could  only  be 
made  through  a  general  pressure,  and  at  the  most  ruinous  sacrifices. 

"  In  view  of  these  facts,  it  would  seem  impossible  for  sincere  inquirers  after 
truth  to  resist  the  conviction  that  the  causes  of  the  revulsion  in  both  countries 
have  been  substantially  the  same.  Two  nations,  the  most  commercial  in  the 
world,  enjoying  but  recently  the  highest  degree  of  apparent  prosperity,  and 
maintaining  with  each  other  the  closest  relations,  are  suddenly,  in  a  time  of 
profound  peace,  and  without  any  great  national  disaster,  arrested  in  their 
career,  and  plunged  into  a  state  of  embarrassment  and  distress.  In  both 
countries  we  have  witnessed  the  same  redundancy  of  paper  money,  and  other 
facilities  of  credit;  the  same  spirit  of  speculation  ;  the  same  partial  successes; 
the  same  difficulties  and  reverses,  and,  at  length,  nearly  the  same  overwhelm- 
ing catastrophe." 

THE  OPINION  OF  NICHOLAS  BIDDLE  ON  THE  EFFECTS    OF   REQUIRING   THE 
PUBLIC  LAND  TO  BE  PAID  FOR  IN  HARD  CASH. 

**  The  whole  pecuniary  system  of  this  country,  that  to  which,  next  to  its 
freedom,  it  owes  its  prosperity,  is  the  system  of  credit.  Our  ancestors  came 
here  without  money — but  with  far  better  things — with  courage  and  industry — 
and  the  want  of  capital  was  supplied  by  their  mutual  confidence.  This  is  the 
basis  of  our  whole  commercial  and  internal  industry.  The  government  re- 
ceived its  duties  on  credi*,  and  sold  its  lands  on  credit.  When  the  sales  of 
lands  on  credit  became  inconvenient  from  the  complication  of  accounts,  the 
lands  were  sold  for  what  is  termed  cash.  But  this  was  only  another  form  of 
credit,  for  the  banks,  by  lending  to  those  who  purchased  lands,  took  the  place 
of  the  government  as  creditors — and  the  government  received  their  notes  as 
equivalent  to  specie,  because  always  convertible  into  specie.  This  was  the 
usage — this  may  be  regarded  as  the  law  of  the  country.  By  the  resolution  of 
Congress  passed  on  the  30th  of  April,  1816,  it  was  declared  that  "  no  duties, 
taxes,  debts,  or  sums  of  money,  accruing  or  becoming  payable  to  the  United 
States  as  aforesaid,  ought  to  be  collected  or  received  otherwise  than  in  the 
legal  currency  of  the  United  States,  or  treasury  notes,  or  notes  of  the  Bank  of 
the  United  States,  or  in  notes  of  banks  which  are  payable  and  paid  on  de- 
mand in  the  said  legal  currency  of  the  United  States." 

"  This  resolution  presents  various  alternatives — the  legal  currency — or  trea- 
sury notes — or  notes  of  the  Bank  of  the  United  States — or  notes  %i  specie 
paying  banks.  A  citizen  had  a  right  to  choose  any  one  of  these 
modes  of  payment.  He  had  as  much  right  to  pay  for  land  with  the 
note  of  a  specie  paying  bank,  as  to  pay  it  for  duties  at  the  custom  house.  If 
this  be  denied,  certainly  any  one  of  them  might  be  accepted  by  the  treasury 
— but  to  prescribe  all  but  one — to  refuse  everything  but  the  most  difficult 
thing — to  do  this  without  notice  of  the  approaching  change  in  the  fundamen- 
tal system  of  our  dealings — is  an  act  of  gratuitous  oppression. 

"  Under  the  operation  of  this  resolution,  the  banks  had  gone  on,  fearing  no- 
thing, as  they  only  had  to  provide  for  the  usual  specie  calls  upon  them — and 
saw  the  country  full  of  specie,  with  no  foreign  demand  to  drain  it  from  them — 
when,  on  a  sudden,  without  any  intimation  of  the  coming  shock,  an  order  was 
issued  by  the  secretary,  declaring  that  their  notes  were  no  longer  receivable, 
and,  of  course,  inviting  all  who  held  the  notes,  or  had  deposits  in  these  banks, 
to  convert  them  into  specie.  It  in  fact,  made  at  once  the  whole  amount  of 
their  circulation  and  private  deposits  a  specie  demand  upon  them.  The  first 
consequence  was  that  the  banks  nearest  the  land  offices  ceased  making  loans. 
The  next  was,  that  they  strove  to  fortify  themselves  by  accumulating  specie. 
It  was  just  at  this  moment  that  the  warrants  for  transfers  were  put  into  their 
liandn.     The  combination  of  the  two  measures  produced  a  double  result — first. 


/ 


84  THE  OPINION  OF  ^flCHOLAS  BIDDLE. 

t)  require  the  banks  generally  to  increase  their  specie,  and  next,  to  give  them 
the  means  of  doing  it  by  drafts  on  the  deposite  banks.  The  commercial  com- 
mmiity  were  thus  taken  by  surprise.  The  interior  banks  making  no  loans, 
and  converting  their  Atlantic  funds  into  specie,  the  debtors  in  the  inte- 
rior could  make  no  remittances  to  the  merchants  in  the  Atlantic  cities,  who 
are  thus  thrown  for  support  on  the  banks  of  those  cities,  at  a  moment  when 
they  are  unable  to  afford  relief  on  account  of  the  very  abstraction  of  their 
specie  to  the  West.  The  creditor  States  not  only  receive  no  money,  but  their 
money  is  carried  aw^ay  to  the  debtor  States,  who,  in  turn,  cannot  use  it,  either 
to  pay  old  engagements,  or  contract  new.  By  this  unnatural  process,  the 
specie  of  New  York  and  the  other  commercial  cities  is  piled  up  in  the  West- 
ern States — not  circulated,  not  used,  but  held  as  a  defence  against  the  trea- 
sury— and  while  the  West  cannot  use  it,  the  East  is  suffering  for  the  want  of 
it.  The  result  is,  that  the  commercial  intercourse  between  the  West  and  the 
Atlantic  is  almost  wholly  suspended,  and  the  few  operations  which  are  made 
are  burdened  with  the  most  extravagant  expense.  In  November,  1836,  the 
money  has  risen  to  twenty-four  per  cent. — merchants  are  struggling  to  preserve 
their  credit  by  ruinous  sacrifices — and  it  costs  -five  or  six  times  as  much  to 
transmit  funds  from  the  West  and  South  West,  as  it  did  in  November,  1835, 
or  34,  or  82.  Thus  while  the  exchanges  with  all  the  world  are  in  our  favor — 
while  Europe  is  alarmed,  and  the  bank  of  England  itself  uneasy  at  the  quan- 
tity of  specie  we  possess — we  are  suffering  because  from  mere  mismanage- 
ment, the  whole  ballast  of  the  currency  is  shifted  from  one  side  of  the  vessel  to 
the  other.  In  the  absence  of  good  reasons  for  these  'measures,  and  as  a  pre- 
text for  them,  it  is  said  that  the  country  has  over-traded — that  the  banks 
have  over  issued,  and  that  the  purchasers  of  public  lands  have  been  very  ex- 
travagant. I  am  not  struck  by  the  truth  or  propriety  of  these  complaints. 
The  phrase  of  overtrading  is  very  convenient,  but  not  very  intelligible.  If  it 
means  anything,  it  means  that  our  dealings  with  other  countries  have  brought 
us  in  debt  to  those  countries.  In  that  case  the  exchange  turns  against  our 
country,  and  is  rectified  by  an  exportation  of  specie  or  stocks  in  the  first  in- 
stance— and  then  by  reducing  the  imports  to  the  exports.  Now,  the  fact  is, 
that  at  this  moment,  the  exchanges  are  all  in  favor  of  this  country — that  is, 
you  can  buy  a  bill  of  exchange  on  a  foreign  country  cheaper  than  you  can 
send  specie  to  that  country.  Accordingly  much  specie  has  come  in — none 
goes  out.  This,  too,  at  a  moment  when  the  exchange  for  the  last  crop  is  ex- 
hausted, and  that  of  the  new  crop  has  not  yet  come  into  the  market — and  when 
we  are  on*the  point  of  sending  to  Europe  the  produce  of  the  country  to  the 
amount  of  eighty  or  one  hundred  millions  of  dollars.  How,  then,  has  the 
•country  overtraded?  Exchange  with  all  the  world  is  in  favor  of  New  York. 
How  then  can  New  York  be  an  overtrader  ?  Her  merchants  have  sold  goods  to 
the  merchants  of  the  interior,  who  are  willing  to  pay,  and  under  ordinary 
circumstances  able  to  pay — but  by  the  mere  fault  of  the  government,  as  obvious 
as  if  an  earthquake  had  swallowed  them  up ,  their  debtors  are  disabled  from 
making  immediate  payment.  It  is  not  that  the  Atlantic  merchants  have  sold 
too  many  goods,  but  that  the  government  prevents  their  receiving  pay  for 
any.  Moreover,  in  the  commercial  cities  money  can  be  had,  though  at  ex- 
travagant rates,  for  capitalists  add  to  the  ordinary  charges  for  the  use  of  it  a 
high  insurance  against  the  loss  of  it.  It  is  not  then  so  much  that  money  is 
not  to  be  procured,  as  that  doubt  and  alarm  increase  the  hazard  of  lending  it. 
*'  Then  as  to  the  banks.  It  is  quite  probable  that  many  of  the  banks  have 
extended  their  issues — but  whose  fault  is  it  ?  Who  called  these  banks  into 
existence  ?  The  executive.  Who  tempted  and  goaded  them  to  these  issues  ? 
Undoubtedly  the  executive.  The  country  five  years  ago,  was  in  possession 
of  the  most  beautiful  machinery  of  currency  and  exchanges  that  the  world 
ever  saw.  It  consisted  of  a  number  of  banks  protected,  and  at  the  same 
time  restrained  by  the  bank  of  the  United  States. 


THE  OPINION  OF  NICHOLAS  BIDDLE.  35 

"The  people  of  the  United  States,  through  their  representatives,  re-charter- 
*ed  that  institution.     But  the  executive,  discontented  with  its  independence, 
rejected  the  act  of  Congress — and   the  favorite  topic  of  declamation  was, 
that  the  states  would  make  banks,  and  that  these  banks  would  create  a  better 
system  of  currency  and  exchanges.      The  states  accordingly  made  banks — 
and  then  followed  idle  parades  about  the  loa'n^  of  these  banks,  and  their  en- 
larged dealings  in  exchange.     And  what  is  the  consequence  ?      The  Bank  of 
the  United  States  has  not  ceased  to  exist  more  than  seven  months,  and  al- 
ready the  whole  currency  and  exchanges  are  running  into  inextricable  confu- 
sion, and  the  industry  of  the  country  is  burdened  with  extravagant  charges 
on  all  the  commercial  intercourse  of  the  Union.      And  now  when  these  banks 
have  been  created  by  the  Executive,  and  urged  into  these  excesses,  instead  of 
gentle  fand  gradual  remedies,  a  fierce  crusade  is  raised  against  them — the 
funds  are  harshly  and  suddenly  taken  from  them,  and  they  are  forced  to  ex- 
traordinary means  of  defence  against  the  very  power  which  brought  them 
into  being.     They  received,  and  were  expected  to  receive,  in  payment  for  the 
government,  the  notes  of  each  other,  and  the  notes  of  other  banks,  and  the 
facihty  with  which  they  done  so,  was  a  ground  of  special  commendation  by 
the  government.     And  now  that  government  has  let  loose  upon  them  a  de- 
mand for  specie  to  the  whole  amount  of  these  notes.     I  go  further.     There  is 
an  outcry  abroad,  raised  by  faction,  and  echoed  by  folly,  against  the  banks  in 
the  United  States.     Until  it  was  disturbed  by  the  government,  the  banking 
system  of  the  United  States  was  at  least  as  good  as  that  of  any  other  com- 
mercial country.     What  was  desired  for  its  perfection  was  precisely  what  I 
have  so  long  striven  to  accomplish — to  widen  the  metallic  bases  of  the  cur- 
rency by  a  greater  infusion  of  coin  into  the  smaller  channels  of  circulation. 
This  was  in  a  gradual  and  judicious  train  of  accomphshment.     But  this  miser- 
able foolery  about  an  exclusively  metallic  currency,  is  quite  as  absurd  as  to 
discard  the  steamboats,  and  go  back  to  poling  up  the  Mi^^sissippi.     Banks  may 
often  err  from  want  of  skill,  and  occasionally  be  as  injurious  as  steam  is — ^but 
it  is  not  the  less  true,  that  the  banks  of  this  country  have  been  the  great  in- 
struments of  its  improvement,  and  that,  during  all  the  convulsions  of  the  last 
fifteen  years,  for  every  American  bank  that  has  failed,  at  least  ten  English 
banks  have  failed.     So  with  regard  to  the  lands.      For  the  last  few  years,  the 
amount  of  the  sales  of  the  pubhc  lands  has  been  a  constant  theme  of  congrat- 
ulation with  the  Executive.     In  the  very  last  message,  on  the  12th  of  Decem- 
ber, 1835,  he  repeats  the  same  strain.   '  Among  the  evidences  of  the  increasing 
prosperity  of  the  country^  not  the  least  gratifying  is  that  afforded  by  the  re- 
ceipts of  the  public  lands^  which  amount  in  the  present  year  to  eleven  millions 
of  dollars.     This  circwnstance  attests  the  rapidity  with  which  agriculture^  the 
first  and  most  important  occupation  of  man^  advanced^  and  contributes  to   the 
wealth  and  power  of  our  extended  territory ^  In  the  same  message  he  declared 
that  the  circulating  medium  has  been  greatly  improved.      By  the  use  of  the 
State  banks,  it  is  ascertained  that  all  the  ivants  of  the  community  in  relation 
to  exohange  and  currency  are  supplied  as  well  as  they  have  ever  been  before? 
Scarcely  seven  months  elapse  when  these  pastoral  and  financial  visions   di- 
aolve  in  air.     Agriculture  ceases  to  be  '  the  first  and  most  important  occupa- 
tion of  man,'  the  State  banks  cease  to  be  the  models  of  exchange  and  cur- 
rency— but  forth  issues  the  secretary  with  a  declaration  that  to  protect  the 
treasury  '  from  frauds,  speculation,  and  monopolies  in  the  purchase  of  public 
lands,' — from  'excessive  bank  credits' — from    'ruinous  extensions    of  bank 
issues' — nothing  shall  be  received  for  land  but  gold  and  silver. " 

"  Now  what  an  exhibition  is  this  ? 

"  The  public  lands  are  exposed  to  public  auction,  the  prices  reduced  in  order 
to  encourage  sales,  and  the  President  stands  by,  exulting  at  the  amount,  when 
suddenly  he  declares  that  he  will  permit  no  speculations,  and  that  he  will  raise 
the  price  of  the  lands,  by  raising  the  price  of  what  alone  he  will  receivcfor 


36  -  DANIEL  WEBSTER^S  OPINION, 

them.  Now,  supposing  it  true  that  men  have  bought  too  much  land.  What 
right  has  the  President  to  dictate  to  the  citizens  of  this  country  whether  they 
buy  too  much  land,  or  too  much  broadcloth  ?  They  might  be  permitted  to 
know  and  to  manage  their  own  concerns,  quite  as  well  as  he  does,  leaving  the 
evil,  if  it  be  one,  to  correct  itself  by  its  own  excess.  If  he  prohibits  the  re- 
ceipt of  anything  but  specie  to  correct  land  speculations,  he  may  make  the 
same  prohibition  as  to  the  duties  on  hardware,  or  broadcloth,  or  wines,  when- 
ever his  paternal  wisdom  shall  see  us  buying  too  many  shovels,  or  too  many 
coats,  or  too  much  champaigne — and  this  brings  the  entire  industry  of  the 
country  under  his  control." 

DANIEL  Webster's  opinion. 

From  a  Speech  delivered  at  Wheelmg^  Va.  {about)  May  20,  183Y. 

"  I  travel,  gentlemen,  for  the  purpose  of  seeing  the  country,  and  of  seeing 
what  constitutes  the  important  part  of  every  country — the  people.  I  find 
everywhere  much  to  excite,  and  much  to  gratify  admiration,  and  the  pleasure 
I  experience  is  only  diminished  by  remembering  the  unparalleled  state  of  dis- 
tress which  I  have  left  behind  me,  and  the  apprehensions,  rather  than  the 
feeling,  of  severe  evils  which  I  find  to  exist  wherever  I  go. 

"  I  cannot  enable  those  who  have  not  witnessed  it,  to  comprehend  the  full 
extent  of  the  suffering  in  the  eastern  cities.  It  was  painful,  indeed,  to  behold 
it.  So  many  bankruptcies  among  great  and  small  dealers,  so  much  property 
sacrificed,  so  many  industrious  men  altogether  broken  up  in  their  business,  so 
many  families  reduced  from  competence  to  want.  So  many  hopes  crushed, 
BO  many  happy  prospects  forever  clouded,  and  such  a  fearful  looking  for  still 
greater  calamities,  all  form  such  a  mass  of  evil  as  I  had  never  expected  to  see, 
except  as  the  result  of  war,  of  pestilence,  or  some  other  external  calamity. 

"  I  have  no  wish,  in  the  present  state  of  things,  nor  should  I  have,  indeed, 
if  the  state  of  things  were  different,  to  obtrude  the  expression  of  my  pohtical 
sentiments  upon  such  of  my  fellow-citizens  as  I  may  happen  to  meet,  nor,  on 
the  other  hand,  have  I  any  motive  for  concealing  them,  or  suppressing  their 
expression,  whenever  others  desire  that  I  should  make  them  known.  Indeed, 
on  the  great  topics  that  now  engage  public  attention,  I  hope  I  may  flatter 
myself  that  my  opinions  are  already  known. 

'*  Recent  evils  have  not  at  all  surprised  me,  except  that  they  have  come 
eooner  and  faster  than  I  had  anticipated.  But,  though  not  surprised,  I  am 
afflicted  ;  I  feel  anything  but  pleasure  in  this  early  fulfilment  of  my  own  pre- 
dictions. Much  injury  is  done  which  the  wisest  future  counsels  can  never 
repair,  and  much  more  that  can  never  be  remedied  but  by  such  counsels,  and 
by  the  lapse  of  time.  From  1832  to  the  present  moment,  I  have  foreseen 
this  result.  I  may  safely  say  I  have  foreseen  it,  because  I  have  presented 
and  proclaimed  its  approach  in  every  important  discussion  and  debate  in  the 
public  body  of  which  I  am  a  member.  In  1S32  I  happened  to  meet  with  a 
citizen  of  Wheeling,  now  present,  v.ho  has  this  day  ivuiinded  meof  what  I 
then  anticipated  as  the  result  of  the  measures  which  the  administration  ap- 
peared to  be  forming  with  regard  to  the  currency.  In  the  summer  of  1833, 1 
was  here,  and  suggested  to  friends  what  I  knew  to  be  resolved  upon  by  the 
executive,  namely,  the  removal  of  the  dcposites,  which  was  announced  two 
months  afierward.  That  was  the  avowed  and  declared  commencement  of  the 
*  Experiment.''  You  know,  gentlemen,  the  obloquy  then  and  since  cast  upon 
those  of  us  who  opposed  the  ''Experiment''  You  know  that  we  have  been 
called  b.xnk  agents,  bank  advocaters,  banlv  hirelings.  You  know  that  it  lias 
been  a  thousand  times  said  that  the  Ex[)eriHient  worked  admirably,  that  no- 
Ihing  could  be  better,  that  it  was  the  highest  ]>ossible  evidence  of  the  practi- 
Ci.l   wisdom  and  F[i{:neily  of  its  contrivers;  n\n\  none  opiKi^-cd  il,  dv  di.'ubted 


DANIEL  WEBSTER'S  OPINION.  Sl 

its  eJSiciency,  but  the  wicked  or  the  stupid.  Well,  gentlemen,  here  is  the 
end,  if  this  is  the  end,  of  this  notable  '■  Experiment.'  Its  singular  wisdom 
has  come  to  this — its  fine  workings  have  wrought  out  an  almost  general 
bankruptcy. 

*'  Its  lofty  promises,  its  grandeur,  its  flashes,  that  threw  other  men'c  sense 
and  understanding  back  into  the  shade — wheje  are  they  now  ?  Here  is  '  the 
fine  of  fines,  and  the  recovery  of  recoveries.'  Its  panics,  its  scoffs,  its  jeers, 
its  jests,  its  jibes  at  all  former  experience,  its  cry  of  a  *  new  poUcy,'  which 
was  so  much  to  dehght  and  astonish  mankind.  To  this  conclusion  has  it  come 
at  last. 

*  But  yesterday,  it  stood  against  the  world  ; 

Now  lies  it  there,  and  none  so  poor  to  do  it  reverence.' 

"  It  is  with  no  feehngs  of  boasting  or  triumph,  it  is  with  no  disposition  to 
arrogate  superior  wisdom  or  discernment,  but  it  is  with  mortification,  with 
humiliation,  with  unaffeeted  grief  and  affliction,  that  I  contemplate  the  con- 
dition of  difficulty  and  distress  to  which  this  country,  so  vigorous,  so  great, 
so  enterprising,  and  so  rich  in  internal  wealth,  has  been  brought  by  the 
policy  of  her  government. 

"  We  learn,  to-day,  that  most  of  the  eastern  banks  have  stopped  payment 
— deposite  banks  as  well  as  others.  The  Experiment  has  exploded.  That 
bubble  which  so  many  of  us  have  all  along  considered  as  the  offspring  of  con- 
ceit, presumption,  and  political  quackery,  has  burst.  A  general  suspension 
must  be  the  result — a  result  which  has  come  even  sooner  than  was  predicted. 
Where  is  now  that  better  currency  that  was  promised  ?  Where  is  that  specie 
circulation  ?  Where  are  those  rupees  of  gold  and  silver  which  were  to  fill 
the  treasury  of  the  government,  as  well  as  the  pockets  of  the  people  ?  Has 
the  government  a  single  hard  dollar?  Has  the  treasury  anything  in  the 
world  but  credit  and  deposites  in  banks  that  have  already  suspended  specie 
payments?  How  are  pubhc  creditors  now  to  be  paid  in  specie  ?  How  are 
the  deposites  which  the  law  requires  to  be  made  with  the  States  on  the  first 
of  July,  now  to  be  paid  ?  We  must  go  back  to  the  beginning  and  take  a  new 
start.  Every  step  in  our  financial  and  banking  system,  since  1832,  has  been 
a  false  step.  It  has  been  a  step  which  has  conducted  us  farther  and  farther 
from  the  path  of  safety. 

.  "The  discontinuance  of  the  National  Bank,  the  illegal  removal  of  the  de- 
posites, the  accumulation  of  the  pubhc  revenue  in  banks  selected  by  the  ex- 
ecutive, and  for  a  long  time  subjected  to  no  legal  regulation  or  restraint,  and 
finally  the  unauthorized  and  illegal  treasury  order,  have  brought  us  where 
we  are.  The  destruction  of  the  National  Bank  was  the  signal  for  the  creation 
of  an  unprecedented  number  of  new  State  banks.  Some  of  them  with  more 
disproportionate,  and  even  more  nominal  capital,  than  the  National  Bank  had 
possessed.  These  banks  lying  under  no  restraint  from  the  general  govern- 
ment or  any  of  its  institutions,  issued  paper  corresponding  to  their  own  sense 
of  their  immediate  interests  and  hopes  of  gain.  The  deposite  with  tlie  State 
banks  of  the  whole  public  revenue,  then  accumulated  to  a  vast  amount,  and 
making  this  deposite  without  any  legal  restraint  or  control  whatever,  increased 
both  the  power  and  disposition  of  the  banks  for  extensive  issue.  In  fact,  the 
government  seems  to  have  administered  every  possible  provocation  to  the 
banks  to  induce  them  to  extend  their  circulation.  It  uniformly,  zealously 
and  successfully  opposed  the  land  bill,  a  most  useful  measure,  by  which  accu^ 
mulation  in  the  treasury  would  have  been  prevented ;  and,  as  if  it  desired  and 
sought  this  accumulation,  it  finally  resisted,  with  all  its  power,  the  deposite 
among  the  States.  It  is  advanced  as  a  reason  for  the  present  overthrow,  that 
an  extraordinary  spirit  of  speculation  has  gone  abroad,  and  has  Ijeen  mani- 
fested, particularly  and  strongly  in  the  endeavor  to  purchase  the  public  land ; 
but  lias  not  every  act  of  the  government  directly  encouraged  this  spirit?     It 


38  DANIEL  WEBSTER'S  OPINION, 

accumulated  revenue  which  it  did  not  need,  all  of  which  it  left  in  the  deposite 
banks.  The  banks  had  money  to  lend,  and  there  were  those  w^lio  were  ready 
to  borrow  for  the  purpose  of  purchasing  lands  at  government  prices.  The 
public  treasury  was  thus  made  the  great  and  efficient  means  of  affecting  those 
purchases  which  have  since  been  so  much  denounced  as  extravagant  specula- 
tion and  extensive  monopoly.  These  purchasers  borrowed  the  public  money ; 
they  used  the  public  money  to  buy  the  pubHc  property ;  they  speculated  on 
the  strength  of  the  public  money  ;  and  while  all  this  was  going  on,  and  every 
man  saw  it,  the  administration  resisted  to  the  utmost  of  its  powder  every  at- 
tempt to  withdraw  this  money  from  the  banks  and  from  the  hands  of  those 
speculators,  and  distribute  it  among  the  people  to  whom  it  belonged.  If  there 
has  been  overtrading,  the  government  has  encouraged  it ;  if  there  has  been 
rash  speculation  in  the  public  lands,  the  government  has  furnished  the  means 
out  of  the  treasury.  These  unprecedented  sales  of  the  public  domain  were 
boasted  of  as  a  proof  of  a  happy  state  of  things,  and  of  a  wise  administration 
of  the  government,  down  to  the  moment  when  Congress,  in  opposition  to  ex- 
ecutive wishes,  passed  the  distribution  law,  thus  withdrawing  the  surplus  re- 
venue from  the  deposite  banks.  The  success  of  that  measure  compelled  a 
change  in  the  executive  policy,  as  the  accumulation  of  a  vast  amounfi  of  money 
in  the  treasury  was  no  longer  desirable.  This  is  the  most  favorable  motive 
to  which  I  can  ascribe  the  treasury  order  of  July.  It  is  now  said  that  that 
order  was  issued  for  the  purpose  of  enforcing  a  strict  execution  of  the  law 
which  forbids  the  allowance  of  credits  upon  purchasers  of  the  public  lands, 
but  there  was  no  such  credit  allowed  before  ;  not  an  hour  was  given  beyond 
the  time  of  sale. 

"In  this  respect,  the  order  produces  no  differences  whatever.  Its  only  effect 
is  to  require  an  immediate  payment  in  specie ;  whereas,  before,  an  imme- 
diate payment  in  the  bills  of  specie-paying  banks  was  demanded.  There  was 
no  more  credit  in  the  one  case  than  in  the  other  •  and  the  government  gets 
just  as  much  specie  in  the  one  case  as  in  the  other ;  for  no  sooner  is  the 
specie,  which  the  purchaser  is  compelled  to  procure  (often  at  great  charge) 
paid  to  the  receiver,  than  it  is  sent  to  the  deposite  banks,  and  the  govern- 
ment has  credit  for  it  on  the  books  of  the  bank  ;  but  the  specie  itself  has 
been  again  sold  by  the  bank,  or  disposed  of  as  it  sees  fit.  It  is  evident  that 
the  government  gets  nothing  by  all  this,  though  the  purchaser,  and  especially 
the  purchaser  of  small  tracts,  are  put  to  great  trouble  and  expense.  No  one 
gains  anything  but  the  bankers  and  the  brokers.  It  is,  moreover,  most  true, 
that  the  art  of  man  could  not  have  devised  a  plan  more  effectually  to  give  the 
large  purchasers  or  speculators  a  decided  preference  and  advantage  over 
small  purchasers  who  purchase  for  actual  settlement,  than  the  treasury  order 
of  July,  1836.  The  stoppage  of  the  banks,  however,  has  now  placed  the  ac- 
tual settler  in  a  still  more  unfortunate  situation.  How  is  he  to  get  money  to 
pay  for  his  quarter  section  ?  He  must  travel  three  or  four  times  as  many 
miles  for  it  as  he  has  dollars  to  pay,  even  if  he  should  be  able  to  obtain  it  at 
the  end  of  that  journey. 

"  I  will  not  say  that  other  causes,  both  at  home  and  abroad,  have  not  had 
in  agency  in  bringing  about  the  present  derangement.  I  know  that  credits 
have  been  used  beyond  all  former  example  ;  that  it  is  probable  the  spirit  of 
trade  has  been  too  highly  excited;  that  the  pursuit  of  business  may  have 
been  pressed  too  fast,  and  too  far.  All  this  I  am  ready  to  admit.  But,  in- 
stead of  doing  anything  to  abate  its  tendency,  our  government  has  been  the 
prime  instrunjent  of  fostering  and  encouraging  it.  It  has  jnirtcd  voluntarily,- 
and  by  advice,  with  all  control  over  the  actual  currency  of  the  country.  It 
has  given  a  free  and  full  scope  to  the  spirit  of  banking.  It  has  aided  the 
spirit  of  speculation  with  the  public  treasure  ;  and  it  has  done  all  this  in  the 
midst  of  loud-sounding  promises  of  an  exclusive  specie  medium,  and  a  pro- 
fessed detestation  of  all  banking  institutions." 


PANIC  AND  REVULSION  OF  185Y. 


CHAPTER  YII. 

PANIC  AND  REVULSIOIir  OF  185t. 

The  revulsion  from  which  we  are  still  suffering  has  been  remarkable  for  its 
suddenness  and  severity. 

On  the  23d  of  August  last,  the  country  to  all  appearance,  was  in  a  state  of 
high  and  general  prosperity.  The-  Fall  business  had  opened  well ;  in  some 
branches  of  business,  dealers  had  done  as  much  as  they  chose  to  do.  Merchants 
were  returning  from  the  watering-places  in  excellent  spirits,  without  a  surmise 
of  disaster.  Pleasure-seekers  were  coming  to  the  metropoUs  in  crowds  to  par- 
take of  the  rich  banquet  of  delights  which  the  caterers  for  the  public  amuse- 
ment had  provided  for  the  opening  season.  The  harvest  of  grain  and  grass 
then  fully  garnered,  was  superabundant ;  and,  though  Indian  corn  was  late, 
yet  there  was  little  doubt  of  its  ultimate  safety  in  all  the  states  south  of  New 
England.  The  great  staples  of  the  South  were  in  active  demand  at  remuner- 
ating prices.  The  manufacturing  interests  of  the  North  were  under  a  cloud, 
it  is  true,  but  they  had  long  been  in  that  condition,  and  it  excited  liitle  remark. 
The  shipping  interest,  since  the  termination  of  the  Crimean  war,  had  been 
scarcely  paying  its  way  ;  but  that,  too,  was  an  old  story.  In  short,  the  whole 
country,  on  the  morning  of  the  last  24th  of  August,  felt  satisfied  with  itself 
and  confident  of  its  future. 

The  following  are  the  prices  at  which  some  of  the  leading  stocks  were  sold 
at  the  New  York  Stock  Exchange  on  that  day : — N.  Y.  Central,  11^  ;  Erie,  28  ; 
Reading,  66  ;  Michigan  Central,  16 J ;  Panama,  90;  Illinois  Central,  106  ;  Dela- 
ware and  Hudson  Canal,  114^;  Park  Bank,  102;  American  Exchange  Bank, 
110. 

We  now  present  the  subsequent  events  in  the  form  of  a  brief 

DIARY  OF  DISASTER. 

Aug.  24th,  1857. — Failure  of  the  Ohio  Life  and  Trust  Company  was  an- 
nounced. A  few  days  before,  its  stock  had  sold  at  102,  and  it  had  declared  a 
semi-annual  dividend  of  5  per  cent.  The  failure  astounded  the  street,  and 
gave  a  shock  to  Confidence  from  which  it  has  not  yet  begun  to  recover.  This 
was  the  beginning  disaster. 

Aug.  25th.— John  Thompson  failed.  The  Habilities  of  the  Ohio  Life  and 
Trust  Company  were  found  to  be,  at  least,  five  millions,  a  large  part  of  which 
were  held  by  New  York  banks.  Increased  alarm  and  distrust.  All  stocks 
fell  from  three  to  seven  per  cent.  N.  Y.  Central,  72  ;  Erie  22 ;  Panama,  86  ; 
Ilhnois  Central,  104. 

Aug.  26th.— Failure  of  seven  country  banks  announced.  Increasing  scarci- 
ty of  money.  Further  decline  in  stocks.  N.  Y.  Central,  71  ;  Erie,  20;  Read- 
ing, 5<J;  Panama,  84 ;  Illinois  Central,  :;9| !  Metropolitan  Bank,  104. 


4o  DIARY  OF  DISASTER. 

Aug.  2*7 th.— Slight  rally.  Metropolitan  Bank,  105 ;  Erie,  21  ;  N.  Y.  Cen- 
tral, 15  ;  Illinois  Central,  99  ;  Delaware  and  Hudson  Canal,  113. 

Aug.  28tli. — Rally  more  than  lost.  Extreme  pressure  for  money.  Metro- 
politan Bank,  102;  Park  Bank,  99.  Bank  of  Commerce,  100;  Delaware  and 
Hudson  Canal,  112  ;  N.  Y.  Central,  '74;  Ohio  Life  and  Trust,  1^7 ;  Erie,  20i 

Aug.  29th. — Slight  decline  on  nearly  all  stocks.  Park  Bank,  98  ;  Am.  Ex. 
Bank,  100;  Bank  of  N.  Y.,  110;  Erie,  19.  Two  per  cent,  a  month  beginning 
to  be  thought  Si  favorable  rate  for  money. 

Aug.  30th. — Sunday. 

Aug.  31st. — The  contraction  of  the  New  York  banks  had.  now  reached  five 
and  a  half  millions  in  two  weeks.  Specie  in  banks  $9,241,305.  Rumors  of 
failures  and  extreme  uneasiness. 

Sept.  1st. — Failure  of  Mechanics'  Banking  Association;  Beebee  &  Co.,  bul- 
lion dealers ;  Adams  &  Buckingham,  and  many  others.  Almost  a  panic. 
Teller  of  Mechanics'  Banking  Association  a  defaulter  to  the  amount  of  $72,000. 
Erie,  18  ;  N.  Y.  Central,  72;  Reading,  55. 

Sept.  2d. — No  new  failures,  and  decided  re-action  from  the  fright  of  yester- 
day. Am.  Ex.  Bank,  95 ;  Metropolitan  Bank,  97  ;  Del.  and  Hud.  Canal,  108 ; 
Erie,  20^  ;  N.  Y.  Central,  72. 

Sept.  3d. — Still  more  decided  rally.  Cheerful,  buoyant  feeling  everywhere ; 
every  one  supposing  that  now  the  crisis  was  over.  Metropolitan  Bank.  99j  ; 
Del.  and  Hud.  109 ;  N.  Y.  Central,  77  ;  Erie,  24 ;  Illinois  Central,  104. 

Sept.  4th. — The  rally  more  than  sustained.  Slight  advance  on  most  of  the 
leading  stocks. 

Sept.  5th. — Rally  nearly  all  lost.  Money  very  tight.  Failure  of  Stillman  & 
Allen.     The  first  of  the  veri/  blue  Saturdays. 

Sept.  6th. — Sunday. 

Sept.  7th. — The  contraction  of  the  banks  had  now  reached  eight  millions 
in  three  weeks.  Specie  in  bank  ten  and  a  half  milHons.  Bank  statement  dis- 
couraging.    Several  failures  announced.     No  general  fall  in  stocks,  however. 

Sept.  8th. — Awful  pressure  for  money,  and  stocks  all  down. 

Sept.  9th. — Fitzburgh  &  Littlejohn,  proprietors  of  the  old  Oswego  Trans- 
portation Co»,  failed.  Other  failures  very  numerous,  and  the  city  full  of 
rumors  and  forebodings.  Am.  Ex.  Bank,  98  ;  Metropolitan  Bank,  99 ;  Park 
Bank,  84;  Del.  and  Hud.,  108;  Erie,  19| ;  Panama,  80;  N.  Y.  Central,  69; 
Reading,  41 J  ;  Illinois  Central,  90. 

Sept.  10th. — Large  fiiilures  among  dry  goods  houses.  Rumor  that  Bowen 
and  McNamee  had  sustained  themselves  by  selling  their  new  marble  store  to 
W.  B.  Astor  for  cash.  Contradicted;  Mr.  Astor  in  Europe.  Every  symptom 
of  an  approaching  panic.     New  York  bank  stocks  fell  from  3  to  5  per  cent. 

Sept.  11th. — No  change,  but  tendency  downward.  Another  dismal  Satur- 
day. 

Sept.  12th.— Sunday. 

Sept.  14th. — Wesley  &  Co.,  stock  brokers,  suspended,  after  having 
paid  $100,000  difTer.      Board  of  Brokers   rcpolvc    to  restrict   time  sulc«  to 


DIARY  OF  DISASTER.-  41 

30  days.  Many  very  large  failures.  Am.  Ex.  bank,  92  !  Del.  and  Hud.  105  ; 
Reading,  41 ;  N.  Y.  Central,  10. 

g^  Sept.  ISth. — Reports  of  extreme  stringency  in  Philadelphia,  Cincinnati,  and 
Chicago.  New  York  bank  statement  encouraging  ;  specie  increasing.  Alarm 
beginning  to  be  felt  for  the  Central  America. 

Sept.  16th. — Increasing  alarm  for  the  Central  America.  Market  feverish. 
Money  at  unheard  of  rates.     Slight  decline  on  most  stocks. 

Sept.  11th. — The  loss  of  the  Central  America  announced.  Anxiety  for  the 
passengers  drew  off"  attention  from  the  effect  of  the  calamity  on  the  times. 
Total  loss,  including  gold  in  hands  of  passengers  and  the  value  of  the  ship, 
about  two  and  a  half  millions.  No  insurance  on  ship  ;  half  a  million  gold  only 
insured  in  New  York. 

Sept.  18th  and  19th. — Market  depressed,  but  quiet;  slight  decline  in  most 
stocks;  Erie,  lYi. 
Sept.  20th.— Sunday. 

Sept.  21st.— Failure  of  Persse  &  Brooks,  Cyrus  W.  Field  &  Co.,  paper  deal- 
ers. Immense  failures  in  Philadelphia,  Caleb  Cope  &  Co.  among  them.  In- 
tense pressure  everywhere.  Am.  Ex.  banl^,  91 ;  Ohio  Life  and  Trust,  8 J ;  N. 
Y.  Central,  07 ;  Illinois  Central,  89  ;  Panama,  81 ;  Erie,  IBj. 

Sept.  22d. — ^Bangs,  Bros.  &  Co.,  booksellers,  failed,  with  many  other  import- 
ant houses.     Run  on  the  Philadelphia  banks. 

Sept.  25th. — Philadelphia  banks  partly  suspended  specie  payments.  Univer- 
sal bewilderment  and  panic.     Decline  of  all  stocks. 

Sept.  26th. — Total  suspension  of  Philadelphia  banks.     All  eyes  directed  to 
New  York  banks.     Am.  Ex.  bank,  88  ;  Metropolitan  bank,  90  ;  Bank  of  Am. 
100;  Ocean  bank,  15  ;  Del.  and  Hud.  103  ;  Panama,  18  ;  Erie,  15  ;  Reading, 
3Y  ;  Illinois  Central,  87  ;  N.  Y.  Central,  66.     Another  of  the  Saturdays ! 
Sept.  2'7th.— Sunday. 

Sept.  28th, — Bank  statement  looked  for  with  extreme  anxiety.  It  was 
thought  encouraging.  The  contraction  had  proceeded  to  $13,500,000  in  six 
weeks — as  though  so  much  money  had  been  annihilated !  Thirteen  presi- 
dents of  banks  formally  declared  that  the  New  York  banks  would  not  suspend. 
Sept.  29th. — Crisis  in  Chicago  :  many  failures  there,  and  panic.  New  York 
full  of  rumors.  Failures  very  numerous,  but  few  important.  Erie  Railroad 
hard  pressed,  and  meeting  called  of  stockholders.  Bank  of  Am.,  98  ;  Metro- 
politan bank,  1Q ;  Del.  and  Hud.  Canal,  98 ;  N.  Y.  Central,  60 ;  Erie,  13. 
Upon  the  whole,  a  better  feeling  in  the  city. 

Sept.  80th. — Further  dechne  in  stocks.  Business  men  in  chronic  panic. 
Money  all  but  impossible  to  get  at  any  price. 

Oct.  1st. — Four  banks  in  Louisville  suspended.  No  improvement  in  money. 
Erie,  10 J  ;  N.  Y.  Central,  54.     All  bank  stocks  lower. 

Oct.  2d. — Absolute  panic.  Michigan  Central  fell  10  per  cent,  under  the  an- 
nouncement that  the  October  dividend  would  be  retained.  Farmers  and  Me- 
chanics Bank  of  Williamsburgh   suspended.     The   great   failures   were,  P. 


42  DIARY  OF  DISASTER. 

Chouteau  Jr.  &  Co.  (five),  Lawrence,  Stone  &  Co.  of  Boston.  Am.  Ex.  bank, 
'70 ;  Reading,  31 ;  N.  Y.  Central,  54. 

Oct.  3d. — The  hard  Saturday.  Thirty-five  milhons  to  pay.  The  struggle 
was  desperate,  and,  on  the  whole,  successful.  Few  notes  protested.  The  sus- 
pension of  the  large  house  of  Clark,  Dodge  &  Co.  was  the  disaster  of  the  day. 
Every  one  felt  greatly  relieved  at  the  close,  and  even  the  croakers  thought  the 
worst  was  over.  Bank  of  Commerce,  78;  Del.  and  Hud.  Canal,  90;  Reading. 
25J  ;  lUinois  Central,  75;  N.  Y.  Central,  51. 

Oct.  6th. — The  Bank  statement  this  morning  affected  business  very  unfavor- 
ably. The  fatal  contraction  had  continued,  and  the  banks  showed  less  strength 
than  had  been  expected.  Decrease  in  loans  and  discounts,  $1,855,934;  de- 
crease in  specie,  $1,926,682;  increase  in  circulation,  $Y7,'794  ;  decrease  in  de- 
posits, actual,  $4,120,498.  The  great  Pacific  House  of  Willets  &  Co.  stopped, 
and  the  American  Exchange  Bank  refused  the  drafts  of  Sather  &  Church,  of  Cal- 
ifornia. Money  was  next  to  impossible.  N.  Y.  6s,  GO ;  Merchant's  Bank,  92  ; 
Metropolitan  Bank,  12 ;  Rutger's  Fire,  106 J  ;  N.  Y.  Central,  52.  Three  Hart- 
ford Banks  suspended.  Better  feeling  in  Boston.  Extra  session  of  the  Penn- 
sylvania Legislature  began. 

Oct.  '7th. — Increased  depression  in  consequence  of  the  Bank  statement. 
Rumors  and  forebodings  on  every  hand.  K  Y.  6s,  90 ;  Bank  of  America,  92 ; 
Am.  Ex.  Bank,  69^  ;  MetropoUtan  Bank,  70 ;  Erie,  10| ;  Reading,  27.  Among 
the  failures  announced  to-day  are  Mellis  &  Ayres,  Blake  &  Brown,  Bulkley  & 
Co.,  all  dry  goods ;  Mark  J.  King,  furs,  and  several  others. 

Oct.  8th.- — Bowen  &  McNamee  suspended ;  also,  W.  G.  Lane  &  Co.  Great 
panic,  and  very  numerous  failures.  N.  Y.  6s,  90 ;  Metropolitan  Bank,  60 ; 
Am.  Ex.  Bank,  65 ;  N.  Y.  Central,  52  ;  Reading  R.  R.,  27  ;  Ilhnois  Central,  80. 

Oct.  9th. — The  Harpers  suspended.  Run  on  the  Park  Bank  for  a  few  hours. 
Bowery  Bank  suspended  after  a  run.  Meeting  of  Bank  officers  at  the  Insur- 
ance Buildings;  no  concert  agreed  upon,  and  no  result  of  the  meeting.  Fail- 
ures numerous  and  very  heavy.  N.  Y.  Gs,  91  ;  Ilhnois  Central  Bonds,  65  ; 
*  MetropoUtan  Bank,  60  ;  Bank  of  Commerce,  70;  N.  Y.  Central,  52;  Erie  R. 
R.,  9i  ;  Harlem,  7. 

Oct.  10th. — Erie  Railroad  Company,  Michigan  Central,  and  Illinois  Central 
failed  to  meet  their  engagements.  Failure  of  John  N.  Genin,  Seymour  &  Co., 
Corning  &  Co.,  and  a  score  of  others.  Run  on  several  of  the  Savings  Banks 
General  panic  and  paralysis.  By  far  the  worst  day  of  the  revulsion,  thus  far. 
Erie,  7^ ;  Metropolitan  Bank,  58  ;  N.  Y.  6s,  91 ;  N.  Y.  Central,  53;  N.  J.  R. 
R.,  100  ;  Bank  of  Commerce,  68J. 

Oct.  11th.— Sunday. 

Oct.  12th. — Grocer's  Bank  stopped.  At  the  Clearing  House,  to-day,  the  of- 
ficers of  the  New  York  banks  formally  declared  a  resolution  to  maintain  specie 
payments  to  the  last.     Complete  anarchy  in  the  stock  market.     Erie  8. 

Oct.  13th. — The  end  !  !  At  ten  in  the  morning,  a  run  of  depositors  for  gold 
began  on  all  the  weaker  banks  in  New  York,  and,  before  the  hour  of  closing, 
the  following  were  compelled  to  suspend : — Broadway  Bank,  Ocean  Bank, 


CAUSE  OF  THE  REVULSION.  43 

Irving  Bank,  Leather  Manufacturers'  Bank,  North  River  Bank,  Merchants' 
Exchange  Bank,  Marine  Bank,  New  York  Exchange  Bank,  St.  Nicholas  Bank, 
Butchers'  and  Drovers'  Bank,  Tradesmen's  Bank,  Artisans'  Bank,  Citizens' 
Bank,  Bull's  Head  Bank,  Chatham  Bank,  People's  Bank,  Market  Bank,  Bank  of 
New  York,  and  the  Hudson  County  Bank,  Jersey  City.  In  the  evening  at  a 
meeting  of  Bank  officers,  it  was  ascertained  that  the  total  amount  of  gold  in 
the  remaining  banks  was  Httle  more  than  five  and  three  quarter  milHons,  and 
it  was  agreed  to  suspend.  The  excitement  throughout  the  city  is  too  fresh 
in  every  one's  recollection  to  require  remark. 

Oct.  14th. — All  the  city  banks  suspended  except  the  Chemical,  which  also 
held  out  in  1837.     Suspension  in  Boston,  etc. 


PRICE  OF  ] 

?LOUR. 

Oct.l,  1856. 

Oct.  1, 1857. 

Decline. 

Superfine  State, 

- 

-  $6  50 

$4  50 

$2  00 

Extra  State, 

. 

-  roo 

4  75 

2  25 

Western  Superfine,     - 

. 

.     6^75 

4  50 

2  25 

Extra  Western,  - 

- 

-     1  10 

5  50 

1  60 

Canadian  extra,  - 

- 

-    7  60 

5  50 

2  00 

Southern  extra,  - 

. 

-     8  00 

5  65 

2  35 

Georgetown,  &c., 

- 

-     9  00 

5  60 

3  50 

THE  VICISSITUDES  OF  COMMERCE. 

A  few  months  since,  the  partner  of  a  commercial  house  in  this  city  was  ta- 
ken to  a  lunatic  asylum,  utterly  deranged,  as  was  said,  by  his  unparalleled 
prosperity  in  business.  During  the  year  previous  his  firm  had  cleared 
$1,300,000.  He  died  in  the  asylum,  and  his  own  estate  was  valued  at 
$2,500,000,  all  invested  in  the  concern  of  which  he  was  a  partner.  The  firm 
itself  failed  the  other  day,  and  is  now  said  to  be  utterly  insolvent.  One  item 
of  the  assets  of  the  deceased's  estate  was  a  thousand  shares  of  the  Illinois 
Central  Railroad  stock,  which  was  seUing  at  the  time  of  his  decease,  at  $140  a 
share,  and  which  was  worth,  after  paying  up  the  instalments,  $800,000.  The 
same  property  sold  yesterday  at  public  sale  at  $50,000. 

All  this  occurred  within  eighteen  months — the  prosperity,  the  insanity,  the 
decease  and  the  insolvency. — Evening  Post. 

THE  NUMBER  OF  FAILURES. 
It  is  not  possible  to  arrive  at  the  whole  number  of  failures  during  the  last 
eight  weeks.  About  260  have  been  reported,  but,  including  those  not  report- 
ed, and  those  of  too  little  importance  to  be  reported,  it  is  probable  that  not 
less  than  500  houses  have  failed  since  the  pressure  began.  The  entire  habili- 
ties  of  these  houses  are  certainly  not  less  than  60  millions  of  dollars. 

THE  CAUSE  OF  THE  REVULSION. 

For  every  general  revulsion,  like  that  of  183Y  and  185^7,  there  are  remote 

causes  as  well  as  the  immediate  and  exciting  cause.     The  immediate  cause  of 

the  present  revulsion  is  known  to  every  one.     It  was  the  bank  expansion  of 

the  last  summer,  succeeded  by  the  sudden  contraction  of  the  past  few  weeks. 


44  HOPE  FOR  THEJFUTURE. ,^ 

The  practical  effect  of  the'contraction,  here'and  elsewhere,  has  been  to  reduce 
the  quantity  of  money  in  circulation  by  more  than  200  millions  of  dollars ! 
Hence,  the  scarcity  of  the  article — hence,  the  bankruptcy,  the  panics,  the 
paralysis. 

But  the  remote  and  real  cause  of  this,  and  every  other  genuine  business 
revulsion,  is  a  previous  destruction  of  value^  which  the  credit  system  has  miti- 
gated and  concealed.  This  previous  destruction  of  value  has  been  owing  to  the 
following  causes : —  r  ' :?     -v? 

Unprofitable  railroads.  ■  ~      -^     ::  v^;       r;;;^ 

Railroad  financiering  to  sustain  companies  really  bankrupt.  ™f'-y-^^ 
Falling  off  in  emigration  from  one-third  to  one-half.  '?^- 'v!'^^ 

Stagnation  of  the  shipping  interest  since  the  termination  of  the  Crimean 

war. 
Excessive  building  of  dry  goods  and  other  palaces  in  New  York,  Chicago, 

and  other  cities. 
General  unprofitableness  of  trade  with  California  for  two  years. 
Extremely  ^embarrassed  manufacturing  interest  for  two  years.     Many 

establishments  in  New  England  run  at  a  loss. 
Excessive  importation  of  ornamental  goods  from  Europe. 
Suicidal  importation  of  useful  articles  which  ought  to  be  made  here. 
Land  speculation  in  the  West  for  the  last  five  years. 
Abuse  of  the  credit  system — (credits  of  6  and  8   months  must  be  abo- 
lished.) 
Ladies'  voluminous,  costumes  causing  the  waste  of  perhaps  one  hundred 

milHon  yards  of  valuable  goods. 
A  too   rapid  absorption  of  the  Western  lands — leaving  half  a   dozen 
I     states  behind  to  get  to  Kansas,  Nebraska,  etc. 

"■  General  neglect  of  the  homelier  and  manlier  occupations,  particularly 
farming ;  and  excessive  fondness  of  the  meaner  callings — such  as  store- 
keeping,  banking  and  speculation. 
Loss  of  two  millions  in  the  Central  America. 

HOPE  FOR  THE  FUTURE. 

*'  What  resources  have  we  abroad  to  depend  upon  ?  And  what  aid  can 
Europe  give  us  during  the  coming  year  ?  These  questions  are  of  vital  import- 
ance, and  will  be  asked  and  answers  given  in  domestic  as  well  as  commercial 
circles. 

*'  We  can  best  resolve  the  problem  by  a  consideration  of  the  effect  of  the 
panic  of  1837  upon  our  foreign  trade.  Not  that  our  troubles  are  as  great,  but, 
they  are  of  a  similar  kind  ;  otherwise  the  comparison  would  not  hold  good. 
We  give  some  statistics  illustrating  the  changes  at  that  time  in  our  foreign 
trade,  and  from  this  we  can  form  some  estimate  of  our  foreign  trade  for  the 
next  year.  * 

Statement  of  Foreign  Commerce  of  the  United  States  for  a  Series  of  Years, 

Years.  Exports.  Imports. 

1836.         -         -         .         -         $128,600,000  190,000,000 

1S40.         ....  132,000,000  107,000,000 


'T^^    EXPANSION  AND  CONTRACTION  OF  THE  N.  Y.  BANKS.       45 

l^'Trom  this  we  see  the  exports  in  four  years  increased  four  millions,  while 
the  imports  decreased  eighty-three  millions,  or  showing  an  improvement  in 
our  foreign  balance  of  eighty-seven  millions  of  dollars.  The  reaction,  that 
took  at  that  period  four  years  to  produce,  will  now  be  produced  in  twelve 
months. 

*'  The  Commerce  of  the  United  States  for  the  fiscal  year  1836,  was  as  fol- 
lows :— exports,  $327,000,000;  imports,  $313,000,000.  The  decrease  in  im- 
ports from  1836  to  1840,  was  48  per  cent,  and  the  increase  in  exports  was  3^ 
per  cent.  Applying  the  same  per  centage  of  increase  and  decrease  to  the 
trade  of  1856,  our  commerce  for  the  present  fiscal  year  would  be  as  follows  : 

Year  1857-58   I        '  " 
Exports,  -  -  -  -  $487,000,000 

Imports,  :;  .  -  -  -  286,000,000 

Balance  in  our  favor,  -  -  $151,000,000 

Add  Cahfornia  Gold,         -  -  40,000,000 

:.     $191,000,000  I 
Debt  due  Europe,  -  -        "   •  40,000,000 

Balance,        ....  fl51,000,000 

*'  From  this  we  see  that  if  Europe  remain  solvent  the  balance  due  us,  after 
paying  the  debt  which  is  now  due  to  Europe,  will  be  over  one  hundred  and 
fifty  millions  of  dollars. 

*'  This  is  an  under  estimate  of  our  exports.  The  Emperor  of  France  has 
just  issued  an  edict  forbidding  the  export  of  grain  from  France.  The  imports 
of  cotton  into  Great  Britain  from  India  this  year  will  be  nominal.  Great 
Britain  will  want  our  flour  and  provisions  for  her  Indian  army.  Enough  has 
been  given  to  show  that  our  exports  must  increase,  and  our  imports  are  sub- 
ject to  our  own  control.  Europe  must  have  our  cotton  and  breadstulFs,  and 
India  our  provisions.  The  gold  from  CaUfornia  must  stay  with  us.  This  aid 
we  did  not  have  in  1837,  and  is  in  itself  alone  sufficient  to  ensure  our  re- 
covery.— Courier  &  Enquirer. 

EXPANSION  AND  CONTRACTION  OF  THE  NEW  YORK  BANKS  IN  1857: 

Liabilities,  consisting  of 

1857.  Deposits  and  Circulation.  Specie. 

Januarys-  •  -$104,000,000  $11,172,000 

April  4--    -  -  •     106,000,000  11,638,000 

July    3  -     -  -  -     108,000,000  12,839,900 

August  15  -  -  -     101,000,000  11,360,900 

August  22  -  -  -       98,000,000  '                       10,197,000 

August  29  -  -  -       93,000,000  9,201,000 

September  5  -  -       88,000,000  10,227,000 

September  12  -  -       85,000,000  12,181,000 

September  19  -  -       84,000,000  13,556,000 

September  26  -  -       81,000,000  13,327,000 

October  3  -  -  -       76,000,000  11,400,000 

October  10  -  -  •       71,000,000  11,476,000 

The  circulation  varying  very  httle  from  $8,000,000.  The  increase  or  dimi- 
nution of  discounts  is  shown  in  the  deposits. 


46  HENRY  WAKD  BEECHER  OX  STOCK  GAMBLING. 


CHAPTER  VIII. 

OPINIONS  OF    DISTINGUISHED  PERSONS    AND  PRESSES,  AS  TO    THE  CAUSES 
OF   THE    PRESENT   REVULSIONS. 

The  pulpit  and  press  have  teemed  with  suggestions  and  explanations  re- 
specting the  present  difficulties.  We  select  the  following,  leaving  the  reader 
^0  make  his  own  reflections  upon  them. 

Horace  Greeley  upon  the  Causes  of  the  Revulsion. 

"  1.  Reduction  of  duties~by  the  Tariff  of  1846,  stimulating  importation  of 
foreign  Metals,  Wares  and  Fabrics  at  the  expense  of  Home  Manufactures. 

"2.  Constant  and  heavy  increase  of  our  indebtedness,  foreign  and  domestic. 
The  Iron  which  'our  artisans  should  have  made  being  purchased  abroad.  State 
stocks,  Railroad  bonds  and  private  credits  were  sent  abroad  in  payment  for 
it.  This  increase  of  our  foreign  debt  strongly  stimulated  a  corresponding  ex- 
pansion'^f  credit  at  home.  Railroads  being  constructed  with  the  proceeds  of 
bonds  sold  in  Europe,  the  merchants  living  near  their  several  lines  bought  goods 
in  the  great  seaports  on  credit,  the  products  of  their  vicinity  were  consumed  by 
the  Railroad  laborers,  and  there  was  nothing  but  Railroad  bonds  with  which 
to  pay  for  the  goods.  These  were  sold  somehow,  and  part  payment  made  ; 
but  the  indebtedness  of  the  interior  to  the  seaboard,  of  the  seaboard  to  Europe, 
was  constantly  increasing.  At  last,  the  market  for  bonds  was  glutted ;  no 
more  could  be  sold,  even  by  the  cord,  and — you  see  what  inevitably  followed." 

HENRY    WARD  BEECHER    ON  STOCK  GAMBLING. 

"There  is  no  more  sin  in  buying  and  selling  stocks  than  in  buying  or  selling 
bank  bills,  or  any  species  of  property.  But  it  is  one  thing  to  buy  and  sell 
legitimately,  and  another  to  buy  and  sell  as  gamblers  do. 

"  Many  honorable  men  pursue  an  honorable  business  in  the.brokerage  of 
stocks.  But  it  is  quite  notorious  that .  millions  and  thousands  of  miUions  of 
dollars  of  stock  are  sold  every  month  under  the  lawful  forms  of  the  Stock 
Brokers'  Exchange,  which  can  be  shown  to  differ  in  no  moral  or  material  re- 
spect from  undisguised  gambUng.  It  is  not  necessary  to  enter  minutely  into 
the  distinctions  between  right  and  wrong  in  buying  or  seUing  of  stocks.  It  is 
enough  to  say,  that  he  who  buys  stock  as  a  bona  fide  method  of  investing  his 
funds,  looking  for  dividends,  or  for  some  benefit  from  the  interest  represented 
by  the  stock,  buys  legitimately  and  without  moral  blame.  But  that  whole 
scheme  of  buying  stocks  for  no  other  purpose  than  to  make  money  upon  the 
bet  that  they  will  rise  or  that  they  will  fall,  is  a  scheme  of  gambling.  Men 
that  do  it  are  gamblers.  All  the  soft  names  on  earth  cannot  be  dissolved  to 
make  a  varnish  strong  enough  to  cover  the  real  wickedness.  Men  will  resent 
the  imputation.  No  man  hkes  to  be  called  a  gambler.  But  the  way  to  avoid 
the  title  is  to  avoid  the  thing. 

"  In  this  gambling  game  the  whole  community  have  more  or  less  partici- 
pated. Some  devote  their  time  to  it.  Since  my  day,  I  remember,  I  think, 
one  concern  to  have  failed  four  times — it  fails  to-day,  is  on  its  feet  to-morrow, 
in  as  good  credit  as  ever.  For  when  the  business  is  a  fraud,  and  the  customs 
of  it  are  dishonesties,  it  does  not  take  a  man  long  to  repair  any  little  cracks 
in  his  reputation. 


THEODORE  PARKER  OX  THE  REVULSION.  47 

"Merchants  are  forsaking  their  legitimate  business  and  dabbling  in  this 
pool.  Their  clerks  following  their  example,  gamble  too.  Simple  men,  seeing 
these  marvels  of  success,  venture  their  hard  earnings,  and  go  to  gambhng 
likewise.  The  law^yer  follows  suit ;  and  that  there  may  be  no  want  of  moral 
-s-anctity,  ministers  of  the  Gospel  are  fouad,  not  a  few  I  am  informed,  secretly 
buying  and  selling  stocks. 

"Now,  when  the  company  themselves  are  gfgdntic  speculators  by  fraudulent 
and  dishonest  means ;  and  when  the  stock  of  the  company  goes  up  and  down 
the  street,  carrying  in  its  hand  a  bowl  drugged  with  gambhng,  and  crowds 
rush  to  drink  its  intoxication,  is  it  strange  that,  at  length,  the  head  is  sick,  the 
whole  body  faint,  and  that  the  commonwealth  Ues  at  length  upon  the  ground, 
wallowing  like  one  possessed,  foaming  and  rending  itself? 
^."  It  is  supposed  that  there  are  one  thousand  million  dollars  invested  in  rail- 
way property.  Can  this  mountain  of  power  be  used  against  good  morals, 
against  commercial  prudence,  and  the  country  not  reel  and  stagger  ?  Can  this 
prodigious  weight  be  cast  rudely  hither  and  thither  upon  the  deck,  and  the 
keel  lie  level  ?  There  is  not  an  honest  man  in  the  land,  patiently  conducting 
a  legitimate  business,  who  is  not  in  the  power  of  these  irregular  forces.  There 
can  be  no  permanent  security,  if  financiers  can,  at  pleasure,  draw  up  such 
enormous  elements  of  powxr,  and  hold  them  suspended,  like  water  spouts,  to 
burst  and  flood  down  desolation,  the  moment  they  are  touched  with  mis- 
fortune. And  if  commercial  men  will  not  draw  tight  the  reins  of  morals  upon 
these  unprincipled  men,  they  will  have  their  own  neglect  to  thank  for  the 
mischiefs  which  will  have  come  upon  them  in  some  sense  by  their  connivance." 

THEODORE  PARKER  ON  THE  REVULSION. 

"  There  is  great  extravagance  of  expenditure.  Perhaps  no  minister  Avas  less 
severe  on  the  indulgence  in  luxuries  than  he  was,  because  he  saw  the  functions 
they  performed ;  and,  besides,  he  never  saw  a  house  too  comfortable  for  men 
and  women,  or  dresses  too  elegant,  though  he  had  seen  a  great  many  houses 
and  dresses  too  costly  for  the  wearer's  means.  Look  at  the  general  style  of 
dress  among  women — its  exceeding  costhness  ;  not  only  among  our  rich,  but 
everywhere,  except  among  the  very  poor,  who  would,  but  cannot.  The  fault 
is  not  with  the  women,  who  bear  all  the  blame,  and  are  the  butts  alike  for  the 
satirist's  wit  and  the  "minister's  dullness.  If  men  wished  women  to  be  clad  in 
sackcloth,  it  would  be  done  before  to-morrow  night ;  for  though  woman  has 
a  greater  love  of  decoration  than  man,  it  is  far  less  than  her  desire  to  please 
him.  And,  indeed,  the  very  love  of  dress  is  with  her  more  a  love  of  pleasing 
others  than  a  feeling  of  self-satisfaction.  Then  comes  the  increased  cost  of 
ships,  houses,  shops,  banks,  offices,  and  the  hke,  which  renders  the  transaction 
of  business  more  costly.  Then  there  is  the  increased  expense  of  city,  town 
and  State  governments,  and  the  foolish  and  wicked  waste  of  municipal  money. 
Though  the  property  of  Massachusetts  has  increased  tenfold  within  a  few 
years,  the  ratio  of  taxation  has  doubled,  and  in  some  cases  trebled.  Then 
there  are  the  idlers.  In  the  town  of  Somewhere  lives  Mr.  Manygirls.  He  is 
a  toilsome  merchant,  his  wife  a  hard-working  housekeeper.  Once  they  were 
poor,  now  ruinously  rich.  They  have  seven  daughters,  whom  they  train  up 
in  utter  idleness.  They  are  all  do-nothings.  They  spend  much  money,  but 
not  in  works  of  humanity,  not  even  in  elegant  accompUshments,  in  painting, 
dancing,  music  and  the  like,  so  paying  in  spiritual  beauty  what  they  take  in 
material  means.  They  never  read  nor  sing ;  they  are  know-nothings,  and 
only  walk  in  vain  show,  as  useless  as  a  ghost,  and  as  ignorant  as  the  block  on 
which  their  bonnets  are  made.  Now,  these  seven  '  ladies,'  (as  the  newspapers 
call  the  poor  things,  so  insignificant  and  helpless,)  are  not  only  idle,  earn 
nothing,  but  they  consume  much.  What  a  load  of  finery  is  on  their  should- 
ers and  heads  and  necks.     Mr.  Manygirls  hires  many  men  and  women  to  wait 


48    ^^^ill^;  THEODORE  PARKER  ON  THE  REVULSION.^ 

on  his  daughters'  idleness,  and  these  servants  are  withdrawn  from  the  pro- 
ductive work  of  the  shop  or  the  farm,  and  set  to  the  unproductive  work  of 
nursing  these  seven  great  grown-up  babies. 

**  On  the  other  side  of  the  way,  Hon.  Mr.  Manyboys  has  seven  sons,  who 
are  the  exact  match  of  the  merchant's  daughters— rich,  idle,  some  of  them 
dissolute — debauchery  coming  before  their  beard — all  useless,  earning  noth- 
ing, spending  much  and  wasting  more.  Their  only  labor  is  to  kill  time,  arid 
in  summer  they  emigrate  from  pond  to  pond,  from  lake  to  lake,  having  a  fish- 
ing-hne  with  a  worm  at  one  end  and  a  fool  at  the  other.  These  are  the  first 
famines  in  Somewhere.  Their  idleness  is  counted  pleasure.  Six  of  these 
sons  will  marry,  and  five,  perhaps,  of  Mr.  Manygirl's  daughters,  and  what 
families  they  will  found,  to  live  on  the  toil  of  their  grandfather's  bones,  until 
a  commercial  crisis,  or  the  wear  and  tear  of  time  has  dissipated  their  fortune, 
they  are  forced  reluctantly  to  toil ! 

"Besides,  there  is  an  enormous  waste  of  food,  fuel,  clothing,  of  everything. 
We  are  the  least  economical  civilized  people  on  the  earth.  Of  course,  the  poor 
are  wasteful  everywhere.  They  do  not  know  how  to  economize,  and  they 
have  not  the  means.  They  must  live  from  hand  to  mouth,  and  half  of  what 
is  put  into  the  hand  perishes  before  it  reaches  the  mouth.  So  likewise  are 
the  rich  wasteful  who  have  inherited  money — almost  never  such  as  have  earn- 
ed it.  The  great  mass  of  the  people  are  not  economical,  but  wasteful — it  is 
the  habit  of  the  whole  country. 

"  The  next  cause  is  the  rashness  of  experiment,  leading  men  to  engage  in 
enterprises  not  well  plamaed,  and  which  turn  out  ill ;  cost  much  and  come  to 
little.  Hence  come  attempts  to  develope  new  forms  of  industry,  or  old  forms 
in  new  places  ;  the  building  of  railroads  in  advance  of  population,  or  in  ad- 
vance of  business,  and  the  great  increase  of  shipping.  But  this  is  a  failing 
that  '  leans  to  virtue's  side.' 

*'  Then  the  spirit  which  prevails  in  our  trade  is  not  a  very  honest  one.  He 
would  not  say  that  we  were  worse  than  other  nations  ;  he  was  sure  we  were 
better,  juster,  more  honest  than  our  fathers  were  100  years  ago.  The  wealth- 
iest merchant  who  did  business  in  this  city  60  years  ago,  would  not  be  tole- 
rated on  'Change  a  single  day.  But  look  at  the  defalcations  of  men  intrusted 
with  public  funds — look  at  the  great  swindlings  by  officers  of  railroads  and 
banks — remember  how  lightly  all  these  things  are  passed  over,  and  how  very 
seldom  a  great  thief  gets  punished  at  all — remember  that  men  fail  in  trade, 
leaving  half  a  million  of  debt,  and  one-tenth  of  a  million  to  discharge  the 
debt — remember  how  the  Pacific  Company  put  $1,600,000  in  gold  of  other 
men's  property,  and  600  of  their  living  bodies  into  a  ship,  with  only  ^x  boats, 
and  no  pump  that  could  throw  water — in  a  ship  that  had  a  reputation  so  bad 
that  she  could  not  be  kept  afloat  without  changing  her  name,  and  making  the 
George  Law  the  Central  America — and  then  you  see  what  a  spirit  there  is  in 
our  trade. 

"  Our  system  of  buying  and  selling  is  a  very  bad  thing.  It  encourages  ex- 
travagance by  putting  off  pay-day  ;  it  makes  the  transaction  of  business  more 
expensive,  by  necessitating  a  great  number  of  clerks  ;  it  gives  opportunity  to 
temptation  and  fraud  ;  it  produces  a  general  unsoundness  in  trade,  and  so  in- 
creases the  cost  of  every  pound  of  bread  we  eat,  every  inch  of  cloth  we  wear, 
every  brick  we  pile  into  our  walls,  and  every  slate  which  roofs  our  houses.  It 
seems  to  be  cheap,  it  turns  out  to  be  dear. 

*'  Here  is  another  cause — the  great  and  controlling  one.  We  make  money 
out  of  what  has  no  intrinsic  value — out  of  paper.  All  property  is  the  product 
of  labor.  To  distribute  from  the  producer  to  the  consumer,  there  must  be 
trade.  For  that,  there  must  be  money,  which  is  simply  the  instrument  of 
trade — a  labor-saving  machine  to  promote  buying  and  selling.  After  much 
experimenting,  mankind  has  taken  gold  and  silver,  and  thereof  made  money, 
the  instrument  of  trade,  the  medium  of  commerce.     Gold  and  silver  are  pro- 


THEODORE  PARKER  ON  THE  REVULSION.        49 

perty,  and  so  represent  the  labor  requisite  to  acquire  them  ;  they  are  trans- 
ferable property,  and,  of  course,  subject  to  the  laws  of  property ;  they  rise 
and  fall  in  value,  and  no  legislation  can  prevent  that,  any  more  than  iron  or 
tin ;  yet,  commonly  they  fluctuate  less  than  any  other  substance  that  could  be 
chosen.  They  are  condensed  property.  And  not  only  are  they  the  medium 
by  which  debts  are  paid,  but  they  are  the  standard  measures  of  all  value. 
Gold  or  silver  made  into  coin  has  no  more  valiTe  than  before.  At  the  mint 
the  government  puts  a  stamp  upon  it,  which  is  simply  a  national  certificate 
that  it  has  a  certain  purity,  or  comes  up  to  a  certain  weight.  It  is  a  certifi- 
cate of  value,  not  a  creating  of  value. 

"Now,  in  America,  we  make  fictitious  money  out  of  a  piece  of  paper,  which 
contains  somebody's  promise  to  pay  a  dollar,  and  this  becomes  an  instrument  • 
of  trade,  by  which  debis  are  paid,  nnd  the  standard  measure  of  value.  Unlike 
the  metallic  dollar,  the  paper  dollar  has  no  intrinsic  worth — is  not  property, 
only  the  lawful  representative  of  property.  We  have  chartered  some  twelve 
or  thirteen  hundred  banks  in  the  United  States  to  manufacture  this  substitute 
for  metallic  money^  on  condition  that  when  the  paper  is  brought  back,  they 
shall  pay  a  metaUic  dollar  for  it.  A  bill,  which  is  a  promise  to  pay,  is  taken 
in  payment  of  debts,  said  to  be  as  good  as  gold  ;  a  certificate  of  debt  is  taken 
instead  of  a  certificate  of  property.  As  there  is  little  demand  for  metallic 
money,  that  is  carried  off.  Like  all  other  merchandize,  it  brings  the  highest 
price  where  it  is  needed  and  used  the  most.  It  is  not  to  be  denied  that  there 
is  a  certain  convenience  in  this,  especially  attending  large  transactions  ;  but 
in  using  it  in  small  sums,  there  is  this  great  inconvenience.  As  paper  costs 
little  labor,  and  is  yet  taken  for  the  representative  of  value,  and  so  a  certifi- 
cate for  labor  done,  it  is  multiplied  to  a  great  extent.  Then  money  is  cheap 
and  prices  go  up.  The  farmer  gets  two  dollars  for  his  bushel  of  corn — that 
is,  he  gets  the  promise  to  pay  two  metallic  dollars.  Wages  rise ;  the  laborer 
gets  more  paper  money  for  his  work,  but  his  grain,  cloth  and  coal  also  rise, 
and  he  gets  no  more  value  than  before.  Accordingly,  as  prices  rise,  it  costs 
more  to  manufacture  than  before,  and  so  we  import  the  products  of  labor 
fram  abroad,  where  there  is  little  paper  money,  and  prices  are  low. 

"  As  we  feel  rich,  because  money  is  plenty,  and  all  men  say  it  is  as  good  as 
gold,  we  import  largely  articles  of  comfort  and  luxury,  and  send  abroad  our 
raw  materials  in,  payment,  to  be  brought  back  manufactured  goods.  But  by 
and  by  the  raw  material  is  not  quite  adequate  to  pay  our  foreign  debts — for 
our  paper  money  is  good  for  nothing  abroad ;  our  foreign  goods,  sold  at  paper 
prices,  must  be  paid  for  in  metallic  money — and  specie  runs  out  of  the  coun- 
try. Then  the  banks,  not  having  the  actual  metalHc  money  to  pay,  refuse  to 
circulate  their  bills  ;  money  becomes  '  short,'  '  tight,' — there  is  a  pressure  in 
the  market ;  money  is  worth  more  than  before,  goods  are  worthless ;  mer- 
chants who  have  bought  goods  on  credit,  and  sold  them  on  credit,  cannot 
meet  their  payments,  and,  accordingly,  must  sell  their  permanent  property  to 
meet  their  payments,  or  else  pay  enormous  rates  of  interest — for  money  is 
merchandise,  and,  when  scarce,  like  bread  in  a  besieged  city,  it  goes  up  to 
famine  prices.  Stocks  fall  in  value  ten,  twenty,  thirty,  forty,  even  fifty  per 
cent.  Capitahsts  become  distrustful,  and  even  refuse  to  loan  at  all.  Traders 
fail,  and  give  up  their  permanent  property  to  their  creditors  ;  it  is  sold  at  a 
reduced  value  ;  the  trader  loses  half,  but  the  creditor  is  only  half  paid. 

"  The  inheritance  of  birth,  the  earnings  of  a  long  life  are  at  once  swept 
away.  In  his  old  age,  the  thrifty  merchant  is  left  with  nothing.  Timid  men 
withdraw  their  money  from  circulation ;  it  lies  still,  and  an  idle  dollar  is  just 
as  useless  as  an  idle  spindle,  or  an  idle  axe.  Great  enterprises  stop.  Men 
are  thrown  out  of  employment.  Hunger  looks  through  the  windows  of  a 
thousand  homes,  making  ugly  mouths  at  wives  and  babes. 

'*  We  take  great  pains  to  prevent  this  evil.  We  try  legally  to  fix  the  value 
«f  this  paper  money  we  have  created,  and  threaten  to  punish  every  man  who 


50  WHAT  THE  BANKS  HAVE  DONE. 

loans  it  at  more  than  six  per  cent.  We  might  as  well  say  that  water  should 
not  run  down  hill.  We  have  tried  to  make  that  money  which  is  no  money, 
which  represenste  no  labor  done,  and  we  cannot  escape  from  the  consequences 
of  our  first  false  principle.  We  wonder  that  specie  does  not  stay  in  the  land  ; 
it  is  because  we  think  paper  money  is  just  as  good,  and  France  and  England 
do  not.  It  rains  gold,  and  we  hold  out  our  dish  bottom  upwards — of  course 
it  is  empty.  We  complain  that  there  is  a  lack  of  specie  in  our  country.  In 
the  last  twelve  months  we  have  exported  more  than  sixty-nine  milUons  of 
gold  from  this  very  land." 

ilEV.    DE..  CHEEVEr's    OPINION. 

*'  God  had  never  put  into  any  nation's  framework  better  machinery  than  he 
put  into  this  nation,  but  when  the  fires  of  prayer,  Und  truth,  and  honesty 
go  out,  the  machinery  ceases  to  work,  and  there  is  no  hope  left.  Their  only 
hope  now  was  in  prayer.  WealtR  could  not  save  them ;  experience  could 
not  save  them  ;'the  constitution  could  not  save  them,  especially  when  misin- 
terpreted and  tortured.  Nothing  could  save  them  but  God.  God  saves  by 
his  word,  and  by  obedience  to  his  word — not  by  adding  his  word  to  the  shelves 
of  a  bible  society,  Jbiit  by  obedience  to  his  word.  That  is  what  God  desires  to 
see ;  and  he  will  see  it  or  this  people  will  go  to  destruction.'^ 

THE    CAUSE    AGAIN. 

*'  When  a  man  earns  more  than  he  spends,  he  is  sure  to  grow  rich,  and  his 
circumstances  are  easy.  So  it  is  with  a  nation.  Let  us  look  a  little  to  our 
trade  for  the  past  twelve  years.  In  this  time  we  have  sent  out  of  our  country 
$353,3'73,980  in  hard  money,  or  gold,  which  is  the  basis  of  all  credit.  We  have, 
in  the  same  time,  imported  $92,166,864  of  money,  leaving  a  difference  of 
$261, 267, 116  sent  out  of  the  country  in  twelve  years  last  past,  over  and  above 
what  we  have  brought  into  it.  What  spendthrifts  we  have  been  !  We  last 
year  imported  $360,890,141  of  goods,  mostly  manufactured  articles.  In  the 
article  of  dry  goods,  we  imported  $80,000,000 ;  why  have  not  our  factories 
made  these  articles  ?  Because  our  exchange  brokers  and  foreign  traders,  and 
those  who  own  slaves,  have  told  us  not  to  do  it.  We  have  obeyed  the  Slave 
power,  and  hence  distress  has  come  upon  us.  If  we  look  at  our  iron  trade,  we 
find  that  in  the  last  twelve  years  we  have  imported  4,070,330  tons  of  railroad 
iron  alone  ;  which  at  $55  a  ton,  amounts  to  $223,867,216,  gone  out  of  the 
country  for  one  article — not  a  pound  of  it  but  should  have  been  made  by  our 
own  people  ;  we  want  railroad  iron  brought  into  the  country  no  more  than  we 
want  paving  stones.  Every  ton  of  iron  contains  twenty -five  days  labor  ;  would 
it  not  be  a  good  thing  to  take  this  iron  out  of  our  own  mines  ?  But  our 
brokers  and  foreign  traders  hare  persuaded  us  to  send  abroad  for  this  iron, 
which  has  been  the  means  of  taking  so  much  money  out  of  the  pockets  of 
our  people.  We  now  find  750  ships  and  vessels  lying  up  idle  in  our  own  port 
of  New  York,  such  is  the  paralysis  of  the  trade  to  foreign  countries  ;  we  have 
no  money,  and  we  are  all  thrown  out  of  employment  t  we  have  sung  the  song 
of  free  trade  until  our  people,  our  manufactories,  our  shipping,  all  have  be- 
come involved  in  one  general  ruin." — Times. 

WHAT   THE    BANKS    HAVE     DONE. 

*'  We  have  only  to  look  at  the  floating  debts  of  our  leading  railway  compa 
nies  to  form  a  pretty  good  idea  of  the  way  our  banks  have  disposed  of  their 
money.     The  mercantile  classes  have  not  been  the  recipients   of  their  usual 
portion  of  bank  loans.     The  railroads  could  affor^  to  pay  better  prices  for 
money,  and  they  therefore  had  the  preference.     The  floating  debt  of  the 


NATHAN  APPLETON'S  OPINION.  51 

Michigan  Southern  Railroad  Company  amounts  to  about  $2,000,OoO ;  the  Erie 
Company,  $2,000,000;  Cleveland  and  Toledo,  750,000;  Hudson  River  Rail- 
road, $500,000  at  least.  Illinois  Central,  $8,000,000,  Michigan  Central,  $1,800,- 
0(M^ ;  and  others  prominent  in  this  market  to  full  five  millions  more — making 
a  total  of  $16,000,000,  the  bulk  of  which  is  held  by  the  banks  in  this  city. 
Their  resources  to  this  extent  are  locked  up  i^  4ihese  securities,  and  not  many 
weeks  since,  with  this  revulsion  right  upon  us,  the  Erie  Railroad  Company 
raised  from  certain  banks  fn  Wall  street,  $6000,000  more.  Instead  of  lending 
money  to  the  full  line  of  their  loans  to  the  commercial  classes  doing  a  legi- 
timate business,  the  banks  have  locked  up  full  |1 5,000,000  in  railroad  accept- 
ances, which  are  not  worth  on  an  average  forty  cents  on  the  dollar.  We 
have  in  this  fact  the  ^rst  great  cause  of  the  collapse. — Herald 

BANK    ARISTOCRACTS. 

"We  suspect  that  one  of  the  great  causes  of  the  mischief  lies  in  the  ine- 
quality of  our  banks,  the  President  of  the  larger  banks  putting  on  aristocra- 
tic airs,  and  compelhng  the  smaller  institutions  to  follow  their  bidding.  There 
is  a  very  great  difference  in  these  institutions ;  the  head  of  five  millions  of  dol- 
lars very  naturally  looks  down  with  a  feeling  of  contempt  upon  the  represen- 
tative of  only  half  a  million.  It  would  be  greatly  for  the  benefit  of  the  com- 
munity if  our  banking  institutions  were  more  nearly  on  a  level,  as  to  the 
amount  of  their  capital;  there  would] then  be  fewer  of  them,  and  our  bank 
Presidents  would  act  together  on  terms  of  greater  equality." — Herald. 

NATHAN    APPLETON's    OPINION. 

"  I  have  for  many  years  beenVith drawn  from  active  business.  I  have  been 
merely  a  looker  on,  but  not  unobservant  of  the  course  of  trade,  and  especially 
of  our  banking  operations. 

"  Our  system  of  currency  is  a  delicate  one.  It  is  founded  on  bank  credits, 
resting  on  a  very  moderate  basis  of  coin.  When  perfectly  balanced,  it  works 
very  well,  but  a  slight  derangement  may  produce  a  great  deal  of  mischief. 
The  great  disturbing  cause  is  a  demand  for  ^specie^for  export,  which  can  only 
be  checked  by  a  contraction  of  the  bank  credits.  During  the  present  year 
we  have  been  going  on  very  smoothly,  under  full  sail,  when  about  the  middle 
of  August,  a  sudden  squall  strikes  us,  which  continues  to  increase  to  a  terrific 
hurricane,  threatening  even  to  swamp  the  ship  itself.  The  question  arises, 
How  comes  all  this  about  ?  what  is  the  cause  ? 

"  New  York  is  the  great  central  banking  power.  She  sets  the  key-note  to 
the  whole  country.  If  she  expands,  the  whole  country  expands.  If  she  con- 
tracts, it  is  felt  to  the  remotest  extremities.  It  is  a  tremendous  power — that 
of  increasing  or  diminishing  the  circulating  medium  of  the  whole  country.  It 
is  a  deep  responsibility,  and  demands  sound  discretion  and  much  wisdom  in 
its  regulation.  Unfortunately  there  appears  to  be  no  unity  of  action,  no  control 
ing  principle,  in  the  management  of  this  power.  It  is  divided  between  fifty- 
five  banks,  each  acting  its  own  separate  part,  under  the  influence  of  different 
opinions  and  different  interests.  Banks  are  public  institutions ;  they  are  found- 
ed for  the  public  good;  and  the  duty  of  consulting  the  good  of  the  commu- 
nity in  the  use  of  their  great  power  is  as  sacred  as  that  of  providing  for  their 
own  safety.  There  is,  apparently,  no  individual  of  sufficient  influence  to  bring 
this  heterogeneous  mass  to  unity  of  action  in  a  crisis  like  the  present,  as  was 
Albert  Galatin,  while  he  lived. 

'*  The  circulating  medium  of  the  city  of  New  York  consists  in  the  liabili- 
ties of  her  banks  in  the  form  of  deposites  and  circulation.  Their  daily  loans 
-and  discounts  increase  or  diminish  these  liabilities.  As  these  liabilities  are 
greater  or  less,  is  money  plenty  or  scarce.  They  constitute  the  fund  out  ot 
which  all  operations  must  be  performed. 


62  PRACTICAL  SUGGESTIONS. 

''''Hunfs  Merchants'  Magazine  contains  tables  of  the  weekly  returns  of  the 
banks  of  the  City  of  New  York  for  the  years  1856  and  1857,  which  furnish  a 
complete  view  of  their  operations.  They  throw  a  flood  of  light  on  the  pres- 
ent state  of  things.  The  return  for  January  3,  1857,  shows  one  hundred  and 
four  millions  of  Habilities,  with  $11,1Y2,000  in  specie.  * 

"This  varied  very  little  from  the  returns  of  the  preceding  six  months,  and 
this  state  of  thhigs  continued  with  little  change,  but  with  a  sUght  tendency 
to  increased  expansion,  up  to  the  15th  August.  The  greatest  expansion  was 
on  the  2d  of  May,  when  the  liabilities  were  108  miUions,  with  12  millions  of 
specie.  The  returns  of  15th  August  shows  101  millions  of  Habilities  and 
11,360,000  specie.  From  this  a  rapid  contraction  commenced,  the  liabilities 
being  reduced  on  5th  September  to  88  millions,  with  10,227,000  of  specie. 
Here  the  contraction  ought  to  have  ceased.  The  object  was  to  stop  the  ex- 
part  of  specie.  That  had  been  done.  Exchange  on  London  had  fallen  below 
the  point  at  which  specie  could  be  shipped  without  loss.  Can  any  mortal 
man  give  me  a  reason,  or  an  apology,  why  contraction  should  continue  a  day 
after  this  point  had  been  reached  ?  The  banks  were  then  stronger  than  they 
had  been  for  two  years.  But  contraction  did  continue  until,  on  the  Sd  Octo- 
ber, the  liabilities  had  been  reduced  to  76  milHons — thus  reducing  the  circu- 
lating medium  of  New  York  City,  from  July,  32  millions,  or  upwards  of  thirty 
per  cent.  Tremendous !  Was  the  like  ever  known  in  the  history  of  bank- 
ing ?  I  have  no  hesitation  in  saying,  it  is  this  continued  contraction  of  the 
New  York  banks,  since  the  6th  of  September,  without  the  slightest  necessity, 
which  has  brought  about  the  present  disastrous  crisis. 

"  There  was  no  decided  overtrade.  There  was  no  speculation,  except  by  a 
few  houses  in  sugar.  There  was,  no  doubt,  an  excess  of  imports,  but  no 
greater  than  for  several  years,  and  the  effect  of  these  was  wholly  cured  on 
the  5th  September,  by  the  rate  of  exchange  on  London.  Why  continue  con- 
traction further?  Was  not  88  millions,  with  lOj  millions  of  specie,  being 
11 J  per  cent.,  as  safe  a  position  as  104  millions  in  January,  with  11  mil- 
lions of  specie,  or  11  per  cent,  on  their  liabilities? 

"  There  is  but  one  answer:  The  New  York  banks  have  been  acting  under 
a  panic,  and  that  panic  they  have  communicated  to  others,  until  there  is 
almost  a  total  loss  of  confidence:  The  consequences  are  before  us,  in  the 
paralysis  of  all  trade  from  Bangor  to  New  Orleans,  the  stoppage  of  banks 
through  a  great  part  of  the  United  States,  the  stoppage  of  factories,  the  dis- 
charge of  thousands  of  laborers,  the  inability  to  bring  our  large  crops  of 
produce  to  market,  the  ruinous  rate  of  two  or  three  per  cent,  per  month  on 
the  strongest  paper,  a  ruinous  depreciation  in  the  price  of  all  stocks,  and 
even  on  exchange  on  London.  In  my  whole  experience  I  have  never  known 
a  crisis  so  severe  as  the  present,  and,  I  must  say,  so  wholly  uncalled  for. 


CHAPTER  IX. 

PRACTICAL    SUGGESTIONS    FOR    CURING    AND    ENDURING    THE    PRESENT 
TROUBLES. 

From  the  thousands  of  valuable  suggestions  respecting  the  cure,  preven- 
tion, aYid  endurance  of  Financial  Revulsions,  which  have  appeared  during  the 
last  few  weeks,  we  present  the  following : — 


PRACTICAL  SUGGESTIONS.  ^-  6.'^ 

PRACTICAL    SUGGESTIONS. 
CARRY    LESS   SAIL. 

Men  must  learn  that  fortunes  are  the  reward  of  a  life  of  economy,  thrift, 
and  industry,  and  that  small  and  certain  profits  are  better  than  speculations, 
usurious  bargains,  and  stock  gambling.  Move  out  of  the  big  houses ;  sell  the 
lace,  satin,  and  damask,  which  you  have  purchased  with  money  that  should 
be  invested  in  your  business ;  discharge  the  coachman  and  unnecessary  house- 
servants  ;  take  the  silk  and  satin  off  the  girls,  and  let  the  boys  walk ;  pay 
your  debts ;  keep  within  the  limit  of  legitimate  business,  and  we  shall  hear 
of  no  revulsions,  nor  panics  that  you  cannot  meet,  without  fear  and  without, 
reproach. 

PAY    ALL   YOU    CAN. 

If  we  cannot  pay  to-day,  let  every  man  forelay  a  little,  and  try  to  pay  to- 
morrow. No  man  should,  in  these  times,  be  inexorable,  and,  in  the  madness 
of  desperation,  oppress  his  neighbor  ;  while,  on  the  other  hand,  none  should 
presume  too  strongly,  either  on  the  ability  or  kindness  of  those  to  whom  he 
-is  indebted.  Let  every  one  try  and  do  his  duty.  If  he  cannot  pay  all,  let 
him,  at  least,  try  and  pay  something ;  for  every  dollar  paid  is  a  positive  relief, 
so  far  as  it  goes ;  and  when  all  the  dollars  are  paid,  every  one  will  breathe 
freer,  confidence  will  be  restored,  and  business  will  begin  to  flow  with  re- 
newed  activity  through  all  its  accustomed  channels. 

HALF  A  LOAF  BETTER  THAN  NO  BREAD. 

Manufacturers,  whose  resources  are  nqt  sufficient  to  carry  them  through 
the  winter  without  the  certainty  of  stoppage,  would  do  well  to  commence 
their  retrenchments  at  once,  so  that  they  may  be  enabled  to  avoid  that  dis- 
tressing necessity.  By  putting  their  men  on  half-time  now,  they  will  be  able 
probably  to  pass  safely  through  this  critical  period,  and  thus  afford  to  a  large 
body  of  industrious  mechanics  some  resource  against  starvation.  This  would 
be  better  than  continuing  a  month  or  two  longer  in  full  operation,  and  then 
stopping  short,  when  the  rigors  of  the  winter  would  render  the  effects  of  the 
suspension  disastrous  to  a  number  of  poor  families. 

MECHANICS    THIS   WINTER. 

To  mechanics  we  say  :  Practice  for  a  time  the  most  rigid  economy— deny 
yourselves  everything  that  your  necessities  do  not  absolutely  call  for — spend 
no  money  on  superfluous  dress  or  idle  junketing — recollect  that  the  lives  of 
your  wives  and  children  depend  upon  your  foresight  and  economy.  Every 
dollar  spared  now  will  be  worth  ten  when  the  horrors  of  a  such  a  winter  as 
that  which  we  have  reason  to  anticipate  will  come  upon  you.  The  mechanic 
who^  gratifies  unnecessary  tastes  or  appetites  in  presence  of  the  dangers 
which  are  threatening  his  family,  we  look  upon  as  criminal. 


64  PRACTICAL  SUGGESTIONS. 

THE    WINTER   IN   THE    CITIES. 

As  the  large  cities  are  likely  to  suffer  most,  from  the  number  of  sufferers 
who  will  crowd  in  upon  them  during  the  pressure  of  the  severe  season,  the 
municipal  authorities  should  everywhere  take  care  to  anticipate,  as  far  as 
possible,  the  heavy  calls  that  will  be  made  upon  them.  Thus,  wherever  there 
are  works  in  contemplation  which  are  likely  to  give  employment  to  the  labor- 
ing population,  steps  should  be  taken  to  complete  the  arrangements  for  put- 
ting them  into  operation.  It  is  better  to  pay  large  sums  for  useful,  or  even 
ornamental  works,  than  to  have  to  dole  them  out  in  eleemosynary  aid.  By 
facing  the  difficulties  that  threaten  us  manfully,  and  making  timely  provision 
for  them,  we  may  pass  over  the  winter  without  having  to  lament  any  extra- 
ordinary aggravation  of  suffering. 

KEEP   OUT    OF   NEW   YORK. 

Business  of  every  sort  is  stagnant  here,  as  it  is  everywhere  else.  Manufac- 
tories and  workshops  are  either  closed  or  more  than  supplied  with  hands 
already.  There  is  not  a  job  to  be  done  which  has  not  already  at  hand  twice 
the  number  of  workmen  required  to  complete  it.  Keep  away  from  the  city, 
then.  Stay  where  you  are  known,  and  where  you  can  struggle  through  the 
impending  want  of  winter,  with  at  least  some  friends  and  acquaintances  to 
help  you,  or  give  you  an  occasional  cheering  word. 

SELL   DRY-GOODS    ON    FOUR   MONTHS. 

It  is  sufficiently  obvious  that  the  difficulties  under  which  the  commercial 
world  is  laboring  result,  more  or  less,  directly  from  the  abuse  of  credit,  and 
that  a  very  considerable  share  of  that  abuse  occurs  in  the  dry-goods  trade. 
The  usual  length  of  credit  among  this  class  of  merchants  is  eight  months, 
while  the  importer's  credit  never  exceeds  five  months,  and  in  many  cases  does 
not  amount  to  so  long  a  time.  Therefore  there  is  against  the  importer  a  balance 
of  three  months'  time — a  very  serious  consideration — which  is  rendered  more 
so  by  the  continual  risk  he  undergoes  in  giving  that  amount  of  credit,  which 
enables  the  retailer  to  purchase  goods  for  both  the  fall  and  summer  trade 
before  paying  for  any.  We  are  aware  of  the  difficulties  which  beset  a  determina- 
tion to  alter  an  existing  state  of  credit,  but  is  it  possible  for  any  country  to 
do  a  safe  business  on  so  unsound  a  principle  ?  When  will  a  better  time  than 
the  present  present  itself  for  our  merchants  to  combine  for  their  mutual 
advantage  ?  Why  not  at  once  take  measures  to  concert  a  combined  reduc- 
tion of  their  term  of  credit  to  four  months,  and  form  the  nucleus  of  a  really 
sound  business  system?  The  railroad  and  telegraph  have  long  since  removed 
the  only  excuse  that  ever  existed  for  long  credits,  and  the  merchants  may 
as  well  profit  by  their  past  and  present  experience  as  wait  for  more  of  the 
same  sort. 

SHORTER   CREDITS. 

How  instantly  would  disappear  the  pressure  under  which  this  city  is  now 
actually  ground  to  powder  if  only  half  of  the  vast  Western  and  Southern 
indebtedness  could  be  realized,  or  if  it  had  never  been  stimulated  by  the  pre- 
posterous system  of  excessive  credits.  In  those  remote  regions,  every  man 
not  a  farmer  is  a  merchant.  He  sets  up  business  without  capital  in  a  store, 
the  rent  of  which  is  absolutely  fabulous.  He  visits  our  city  with  letters  intro- 
ducing him  as  enterprising  and  industrious.  Responsibility  is  not  referred 
to.     Yet  goods  are  crowded  on  him  with  a  folly  only  matclied  by  that  with 


FEAOTiOAL  SUGGESTiOKS.  '  i-,_         55 

which  they  are  purchased.  He  buys  double  the  amount  he  needs.  Why  not? 
He  has  never  kept  store  until  now,  and  can  have  no  correct  guide  from  expe- 
rience by  which  to  regulate  his  purchases.  He  may  be  honest  and  deserving, 
and  intend  to  pay.  But  a  deliberate  swindler,  who  does  not,  can  obtain  the 
same  recommendations,  presents  them  and  his  clean  shirt  together,  obtains  a 
costly  stock  of  goods  with  the  same  astounding  faciUty,  and  forthwith  van- 
ishes into  a  fog  which  never  lifts.  The  annudllosses  from  this  class  of  men 
are  enormous ;  yet  the  same  loose  system  of  credits  receives  no  effectivQ 
check.  The  honest  buyer  returns  home  with  his  stock,  and  soon  discovers 
that  he  is  overloaded  with  goods  that  he  cannot  sell.  The  goods  that  were 
foolishly  forced  on  him  in  New  York,  he  must  force  off  on  his  neighbors  at 
home,  and,  to  get  rid  of  them,  sells  on  a  credit  to  people  who  may  design  to 
pay,  but  who,  when  pushed  for  the  amount,  set  up  every  form  of  procrastina- 
tion. The  farmers  will  not  pay  their  bills  because  they  have  not  sold  their 
wheat,  and  they  refuse  to  part  with  it,  because  wheat  happens  to  be  down. 
The  storekeeper,  having  no  capital  of  his  own,  has  nothing  with  which  to 
pay ;  and  thus  it  is  that  country  notes  possess  no  convertible  value.  Our 
merchants'  pocket-books  are  plethoric  with  paper  of  this  description.  It  is 
convenient,  as  an  evidence  of  debt,  to  be  sued  out.  with  less  delay  than  an 
open  account  upon  the  ledger,  but  it  seldom  appreciates  to  the  dignity  of 
becoming  even  a  collateral.  What  position  can  it  assume  at  a  crisis  such  as 
this?  Let  us  hope  that  among  the  hard  lessons  which  the  business  commu- 
nity here  is  now  learning,  it  may  learn  caution  in  its  credit  system,  and  abol- 
ish utterly  the  practice  of  these  loose  and  indiscriminate  ventures. — Tribune. 

A  lady's  suggestion. 
Sewing  is  a  peculiarly  appropriate  feminine  employment ;  but  it  is  an  art,  and 
requires  an  apprenticeship.  We  propose,  in  these  hard  times,  to  fill  up  our 
leisure,  by  learning  to  sew.  We  ought  to  have  a  law  like  thai  among  the  Jews, 
that  every  man  shall  have  a  trade,  and  add  to  it,  that  every  woman  shall  learn  to 
sew.  It  would  make  us  better  and  happier,  while  it  is  really  almost  necessary 
to  all.  The  rich  would  know  the  value  of  work,  and  how  to  direct  it  to  be 
done  ;  the  poor  would  have  added  resources,  for  their  support  and  means  of 
economy  in  the  management  of  their  own  clothes.  Much  is  now  wasted 
with  them  from  careless  and  unskillful  making ;  and  any  one  who  has  tried 
it  knows  how  difficult  it  is  to  find  a  good  seamstress.  Much  of  the  mournful 
drudgery,  even  such  as  gave  rise  to  the  famous  "  Song  of  a  Shirt,"  arises  from 
their  want  of  skill.  A  good  seamstress  once  asked  a  poor  woman  how  many 
pieces  of  a  certain  kind  of  work  she  could  make  in  a  day?  "Only  twelve,  at 
a  cent  a  piece."  Starvation  prices,  would  be  the  cry  at  once;  yet  the  Seam- 
stress took  some,  and  made  twelve  in  an  hour,  with  ease.  Here  is  the  same 
difference  always  found  between  a  skillful  and  an  unskillful  workman.  Now 
is  a  good  time  for  us  all  to  learn  to  sew,  not  to  take  away  work  from  the 
poor,  provided  we  have  money  to  pay  them,  but  in  order  to  help  ourselves, 
and  then  to  help  others.  Let  it  be  an  established  fact,  that  a  knowledge  of 
sewing  is  as  essential  a  part  of  a  woman's  education — every  woman's — as  a 
knowledge  of  reading ;  more  so,  absolutely,  than  writing. 

STUDY   THE    SUBJECT. 

During  the  coming  winter  many  of  the  producing  classes  will  not  probably 


£6 


jokec^  and  literature  on  the  panic. 


be  called  upon  to  produce  anything.  There  will  be  plenty  of  time  for  read- 
ing, and  instead  of  squandering  it  in  the  perusal  of  wishy-washy  novels,  those 
who  are  waiting  for  spring,  and  the  work  which  we  hope  spring  will  bring 
with  it,  should  read  the  most  approved  works  upon  Trade  and  Currency.  We 
have  purposely  av«oided^recommending  any  particular  course  or  doctrine. 
Read  all  you  can  lay  your  hand  on — Smith,  Jacobs,  Bentham,  Mill,  Cobbett, 
Gouge,  Carey.  Read  the  Hard-Money  men  and  the  Paper-Money  men,  the 
Free  Traders  and  the  Protectionists.  Choose  between  them,  guided  by  your 
own  good  sense  and  experience,  fully  convinced  that  as  to  such  matters  every 
American  owes  it  to  himself  and  to  his  family  not  to  stand  halting  between 
two  opinions.  No  topics  will  be  more  fully  discussed  for  some  time  to  come 
than  those  of  Banking  and  Corporations ;  and  he  will  be  a  great  way  behind 
the  times,  and  hardly  fit  to  vote  for  the  Town  Constable,  who  does  not  know 
something  about  them. 


CHAPTER  X. 

JOKES  AND  LITERATURE  OF  TBK  PANIC. 


SONG  OF  THE  STREET. 


Rushing  'rouud  the  corners, 
Chasing  every  friend, 
Plunging  into  banks — 
Nothing  there  to  lend — 
Piteous ly  begging 
Of  every  raatf  you  meet. 
Bless  me  !  this  \i  pleasant, 
"Shinning"  on  the  street. 

Merchants  very  short 
Rimning  neck  and  neck, 
Want  to  keep  a'going — 
Praying  for  a  check ; 
Dabblers  in  stocks, 
Ulue  as  blue  can  be, 
Evidently  wishing 
They  were  "fancy  free." 

All  our  splendid  railroads 
Got  such  dreadful  knocks. 
Twenty  thousand  Bulls 
Couldn't  raise  their  stocks; 
Many  of  the  Bears, 
In  the  trouble  sharing. 
Now  begin  to  feel 
They've  been  overbearing. 

Risky  speculators 
Tumbling  with  the  shock, 
Never  mind  stopping 
More  than  any  clock; 
Uiil  they  give  big  dinners, 
Smoke  and  drink  and  sup, 
Going  all  tho  bettor 
For  a  winding  uj). 

Banking  institutions. 
Companies  of    '  trust.' 
With  other  people's  money 
Go  oir  on  a  bust; 
Houses  of  loug  standing 


Cru moling  in  a  night —  \ 
With  so  many  "  smashes, ''i 
No  wonder  money's  iighL    ' 

Gentlemen  of  means — 
Having  lots  to  spend — 
Save  a  little  sympathy, 
Nothing  have  to  lend; 
Gentlemen  In  want — 
Willing  to  pay  double — 
Find  they  can  borrow 
Nothing  but  trouble. 

Half  our  men  of  business 
Wanting  an  extension. 
While  nearly  all  the  others 
Contemplate  suspension; 
Many  of  them,  though. 
Don't  appear  to  dread  it; 
Every  cent  they  owe 
Is  so  much  to  their  credit. 

Brokers  all  are  break  ng, 
Credit  all  is  cracked. 
Women  all  expanding 
As  the  banks  contract. 
Panic  still  increasing — 
Where  will  the  trouble  rnd, 
While  all  hands  want  to  borrow, 
And  nobody  can  lend  y 

Running  round  the  corners. 
Trying  every  source; 
Asking  at  the  Banks- 
Nothing  there,  ofconne  ; 
Money  getting  tigliter, 
Misery  complete — 
BleRS  me  !  thii*  is  pleasant, 
''  Shinning"  on  the  street. 
{Eoen  Po.^t  )  Wail-strket. 


JOKES  AND  LITERATURE  ON  THE  PANIC. 


61 


PANIC   POETRY. 

THE  LAY  OF  THE  DIRECTORS. 


Respedfully  deiidaed  to  the  Directors  of  the  - 

Who,  when  the  times  were  good  and  bright, 

And  speculation  at  its  height, 

Made  Railroad  shares  appear  all  right  ? 

Directors. 

Who,  when  my  money  was  paid  in. 
Assured  me  that  the  road  must  win 
A  large  percentage  on  the  "tin?" 

Directors. 

Who  made  the  costs  increase  so  fast, 
And  shared  in  contracts,  long  and  vast, 
And  filled  their  pockets  to  the  last  ? 

Directors. 

Who  flattered  me  with  hope  of  gains 

From  "branches,"  "air-lines,"  "lightning 

trains," 
And  "feeders,"  leading  to  the  mains? 

Directors. 

Who,  when  the  chance  seemed  rather  blue 
For  dividends  and  earnings  too 


-  R.  B.  Co.,  by  a  Victimized  Stockholder. 


"Cooked"  the  accounts  to  make  them  "do?" 
Directors 

Who  know  the  arts  of  financiers, 
And  charge  fat  fees  as  endorsers, 
And  turn,  at  pleasure,  "bulls"  or  "bears?" 
Dliectors. 

Who,  when  grave  doubts  arise  in  this, 
Seek  lands  "  where  ignorance  is  bliss," 
And  think  large  "  sells"  there  not  amiss  ? 
Directors, 

Who  swell  the  load  of  floating  debts, 
And  set  all  sorts  of  traps  and  nets, 
Who  catch  the  public  with  their  frets  ? 

Directors. 

Whom  should  stockholders  guard  with  care, 
Lest  they  be  cheated,  "  hide  and  hair," 
And  all  their  hopes  prove  empty  air  ? 

Directors. 

Evening  Post. 


When  merchants  fondly  trust  to  paper, 
And  find  too  late  that  banks  betray, 

What  art  can  help  them  though  the  scrape,  or 
Suggest  the  means  wherewith  to  pay  ? 


LINES  BY  BUSTER. 

[NOT  BY  GOLDSMITH.] 


The  only  way  to  stop  each  croaker, 
And  pay  the  banks  to  whom  they  trust ; 

To  bring  repentance  to  the  broker, 
And  wring  his  bosom,  is,  "  to  bust !" 

Evening  Post. 


MONEY. 


Success  will  gild  the  bitterest  pill, 

While  failure  sours  honey; 
The  surest  cure  for  every  ill 

And  every  grief  is  Money  ! 

If  you  should  wound  one's  finer  feeling. 

By  being  rude  or  rash, 
Atid  can't  succeed  the  hurt  in  healing 

By  gentle  means,  try  Cash  ! 

There's  nothing  like  it;  'tis  as  sure  as 

"Death  or  quarter-day;" 
A  man  i^  never  put  in  duress 

When  he's  prepared  to  pay. 


The  bilious  man  will  lose  his  bile, 

The  bitter  cease  to  frown; 
The  inconsolable  will  smile 

At  sight  of  money  down. 

Business  goes  on  by  sea  and  laud 
Just  as  you  "  foot  the  bills." 

If  any  job  you  have  on  hand 
Sticks  fast— just  ^^  grease  the  wheels.' ' 

So,  in  the  sorest  pinch  in  life, 
One  friend  will  never  fail — 

Surer  than  father,  brother,  wife — 
That  is,  "  cash  on  the  naiW' 
Evening  Post. 


"  Times  are  improving,  and  men  are  getting  on  their  legs  again,"  said  a 
gentletnan  to  his  friend.  "  How  so  ?"  "  Why,  those  who  used  to  ride  down 
in  their  carriages  now  walk." 

Wall-Street  Broker — "  Here,  boy,  give  me  a  paper,  and  remind  me  to 
give  you  the  coppers  to-morrow  morning." 

Newsboy — "No,  ycr  dont;  we  don't  trust  you  brokers  now." — N".  Y. 
Picayune. 

Good  Sign. — A  man  smiled  on  'change  yesterday,  and  escaped  without 
personal  injury. — Boston  Post. 


68  JOKES  AND  LITERATURE  ON  THE  PANIC. 

MR.  JONES\S  COMMERCIAL  ARTICLE. 

(It  may  perhaps  be  necessary  to  state  that  the  commercial  editor  of  a  lead- 
ing daily  being  ill,  application  was  made  at  our  office  for  a  gentleman  to  do 
the  markets  for  said  Journal.  Mr.  Jones  having  apparently  exhausted  his 
humorous  vein  for  the  week,  we  recommend  him.  He  did  the  work  in  excel- 
lent style,  but  for  some  reason  or  other,  the  editor-in-chief  of  the  Journal  al- 
luded to  rejected  his  work.     Injustice  to  Mr.  Jones  we  insert  it  here.) 

Pea-Nuts. — The  market  is  steady,  though  prices  are  slightly  depressed, 
through  the  fluctuations  in  the  money  market.  One  or  two  heavy 
dealers  have  been  severely  bitten  in  operating  for  a  rise.  They  will  not  get 
out  of  the  corner  under  a  heavy  loss,  unless  there  should  be  a  sudden  turn  in 
the  market.  We  note  sales  of  two  pecks  at  48  cents,  for  consumption,  and  a 
bushel  and  a  half  on  time,  private  terms.  The  failure  of  Barney  McGinn,  a 
heavy  holder,  is  reported  to-day.  This  is  due,  however,  to  outside  speculation, 
rather  than  to  his  legitimate  trade,  and  affords  another  warning  against  that 
speculative  spirit  now  so  rife  in  our  land,  and  which,  unless  checked,  will  in- 
volve the  whole  commercial  community  in  one  broad  blaze  of  ruin.  Mr. 
McGinn  might  have  borne  his  losses  in  the  pea-nut  trade,  but  his  large  and 
unsuccessful  ventures  in  Musk  and  Water-Melons  dragged  him  down.  His 
own  statement  of  his  affairs  is  as  follows  : 

Liabihties     -        -        -        - |2  87J 

Assets : 

Pea-nuts  on  hand $0  26 

Water-Melons  (slices,  and  much  depreciated)  0  13 

Musk-Melons O  06 

Memoranda  against  Newsboys  -         -       -      1  Or — 1  45 


Excess  of  Liabilities 1  42  J 

It  is  almost  needless  to  say  that  the  memoranda  are  nearly  totally  worthless 
as  only  a  smalljportion  of  the  amount  is  covered  by  collateral  security,  and 
that  security  consists  in  two  Sunday  Heralds  of  January  8d,  185^7,  a  Bank- 
Note  Reporter  for  March,  and  two  copies  of  John  Dean  and  His  Mary  Ann. 
The  creditors  may  therefore  look  for  about  ten  cents  in  the  dollar. 

Persimmons. — Anticipation  of  a  bad  season  have  given  ^greater  stringency 
to  this  article  than  the  demand  for  it  usually  justifies.  Add  to  this,  ravages  of 
Woodpeckers  and  Crows,  and  it  will  be  seen  that  speculators  arc  justified  in 
their  expectations.  Moses  Taylor,  the  Stewarts,  Mr.  Heckwelder,  and  others, 
are  understood  to  be  cornering  extensively  for  a  rise.  Should  the  expected 
advices  from  New  Jersey  and  Tinicum,  however,  proved  favorable,  as  a  few 
confidently  predict  they  will,  the  Bulls  will  suffer  largely. 

Welt  wig  sales  of  fifty  quarts  at  10  cents,  buyers  sixty  days.  One  or  two 
small  lots  for  consumption  have  been  contracted  for  at  10 J  to  11.  If  it  were 
our  province  to  give  advice,  we  should  caution  outside  speculators  that  time 
operations  in  this  article  at  present  are  particularly  risky. — N.  Y.  Picayune. 


[From  t?ie  French.] 
Monday,  I  started  my  bank  operations ; 
Tuesday,  owned  milUions,  by  all  calculations  ; 
Wednesday,  my  Fifth  Avenue  palace   began ; 
Thursday,  I  drove  out  a  spanking  btiy  span  ; 
Friday,  I  gave  a  magnificent  ball ; 
And  Saturday  smashed — with  just  nothing  at  all. 
— Fvcning  Post. 


JOKKS  AiVD  LITERATURE  OX  TOE  TAMO. 
THE  PATIENCE  OF  THE  POOR. 

BY   RICHARD  MONCKTON   MILNEW. 


59 


When  leisurely  the  man  of  ease 
His  morning's  daily  course  begins, 
And  round  him  in  bright  circles  seen 
The  camforts  Independence  wins, 
He  seems  unto  himself  to  hold 
An  utcontested  natural  right 
In  life  a  volume  to  unfold 
Of  simple  ever-new  delight. 

And  if,  before  the  evening  closf*, 
The  hours  their  rainbow  wings  let  fall, 
And  sorrow  shakes  his  bland  repose, 
And  too  continuous  pleasures  pall, 
He  murmurs  as  if  nature  broke 
Some  promise  plighted  at  his  birth, 
In  bending  him  beneath  the  yoke 
Borne  by  the  common  sons  of  earth. 

Tlie]/  starve  beside  his  plenteous  board, 
Tfiey  halt  behind  his  easy  wheels, 
But  sympathy  in  vain  affords 
The  sense  of  ills  he  never  feels. 
He  knows  he  is  the  same  as  they, 
A  feeble,  piteous,  mortal  thing, 
And  still  expects  that  every  day, 
Increase  and  change  of  bliss  should  bring. 

Tlierefore,  when  he  is  called  to  know 
The  deep  realities  of  pain. 
He  shrinks  as  from  a  viewless  blow. 
He  writhes  as  in  a  magic  chain  ; 
Untaught  that  trial,  toil  and  care, 
Are  the  great  charter  of  his  kind, 
It  seems  disgrace  for  him  to  share 
Weakness  of  flesh  and  human  mind. 

Not  so  the  People's  honest  child, 
The  field-flower  of  the  open  sky. 
Ready  to  live  while  winds  are  wild. 
Nor,  when  they  soften,  loth  to  die  ; 
To  him  there  never  came  the  thought 
That  this  his  life  was  meant  to  be 
A  pleasure-house,  where  peace  unbought 
Should  minister  to  pride  or  glee. 


You  oft  may  hear  him  murmur  loud 
Agains  the  uneven  lots  of  Fate, 
You  oft  may  see  him  inly  bowed 
Ben<fath  affliction's  weight  on  weight ; — 
But  rarely  turns  he  on  his  grief 
A  face  of  petulent  surprise, 
Or  scorns  whato'er  benign  rehef 
The  hand  of  Gocl  or  man  supplies. 

Behold  him  on  his  rustic  bed. 
The  unluxurious  couch  of  need. 
Striving  to  raise  his  aching  head, 
And  sinking  powerless  as  a  reed , 
So  sick  in  both  he  hardly  knows 
Which  is  his  heart's  or  body's  sore, 
For  the  more  keen  his  anguish  grows 
His  wife  and  children  pine  the  more. 

No  search  for  him  of  dainty  foo(i , 

But  coarsest  sustenance  of  life, — 

No  rest  by  artful  quiet  wooed, 

But  household  cries  and  wants  and  strife 

Affection  can  at  best  employ 

Her  utmost  of  unhandy  care, 

Her  prayers  and  tears  are  weak  to  buy 

The  costly  drug,  the  purer  air. 

Pity  herself,  at  such  a  sight, 
Might  lose  her  gentleness  of  mien, 
And  clothe  her  form  in  angry  might, 
And  as  a  wild  despair  be  seen  ; 
Did  she  not  hail  the  lesson  taught 
By  this  unconscious,  suffering  boor, 
To  the  high  sons  of  lore  and  thought, 
— ^The  sacred  Patience  of  the  Poor. 

This  great  endurance  of  each  ill, 
As  a  plain  fact  whose  right  or  wrong 
They  question  not,  confiding  still, 
That  it  shall  last  not  overlong  ; 
Willing,  from  first  to  last,  to  take 
The  mysteries  of  our  Ufe,  as  given, 
Leaving  the  time-worn  soul  to  slake 
Its  thirst  in  an  undoubted  Heaven. 


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